liability of service tax payment

[ANIL KUMAR]

Respected Sir

Please give suggestion regarding service tax liability payment by service recipient.

Whether we pay service tax on gross value or excluding service tax charged by service provider.

Details of Manpower bill are as follows

Total bill Value :- 26870/-

Service tax charged by service provider on 25% of bill value :- 830/-

Gross Value :- 27700/

Either we (Service Provider) pay service tax on Gross value i.e on 27700/ or Bill Value i.e on 26870

Please clarify.

Regards

[PAWAN KUMAR]

Dear Sir,

As per my view, service tax is to be charged on bill value i.e. 26870.

[Rajagopalan Ranganathan]

Dear Shri. Anil Kumar,

You have to pay service tax of bill value, that is, ₹ 26870/-.

[Mahir S]

Yes Sir, the submission made above by learned friends is true.

(However, department would not mind if you pay service tax on Gross Value...)

[Rajagopalan Ranganathan]

Dear Shri. Anil Kumar,

I apologize for the typing error that has crept in my previous reply. You are liable to pay service tax on 75% of the bill value, that is, ₹ 26870/-.

[YAGAY and SUN]

Dear Anil,

Service Tax under PRCM would be payable by you on the 75% value of the basic Invoice Value i.e. INR 26870/-

Regards,

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

[RAHUL SETHIA]

Dear Mr. Anil,

According to me, service tax should be charged on bill value, which in your case is ₹ 26870/-. simply putting, service tax cannot be charged on service tax itself.

Regards,

Rahul

AI Summary

Service tax valuation: charge on invoice value excluding tax component, not on gross amount under PRCM.
Service tax is levied on the invoice or bill value and not on the service-tax element itself; for manpower-supply services under PRCM the taxable base is the bill value (75% of basic invoice value in the example), and service tax must be calculated on that amount rather than on the gross sum that includes the tax.