Service under Business Auxillary Service

[MANASH MUKHERJEE]

A company having registration under Business Auxiliary Service is selling " High Security Number Plates" to their clients and paying service tax on the fitment charge collected by them from the clients. The actual value of the goods (i.e. the number plate) is not taken into consideration while calculating service tax. My question is weather the Service tax valuation is properly been done. Moreover they are paying VAT on the value of the goods separately.

[Mahir S]

Yes sir, service tax valuation appears to have been properly done, as service tax is to be paid on the services provided by the service provider.

[KASTURI SETHI]

Rightly advised, Sir, service portion being paltry.

[Ganeshan Kalyani]

Valuation rules to be applied only when the cost of materials and the value of service is not known. In your case you know both the aforementioned components and therefore you have correctly complied for service tax. Thanks.

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of above.

[Mahir S]

Thanks all for the appreciation

AI Summary

Service tax valuation: chargeable only on the service component, not on separately valued goods; VAT applies to goods.
Service tax is confined to the service component where a Business Auxiliary Service provider separately invoices fitment of high security number plates and pays VAT on the plates; valuation rules do not apply when the values of goods and services are known, so service tax is payable only on the fitment charge.