Service tax on Business Auxillary Service.

[MANASH MUKHERJEE]

Dear Sir,

A party 'X' is providing service to another party B by selling the goods of B. Party X receives commission from B and pays Service tax on the commission received under the category of ' Business Auxillary Service'. Now subsequently, it is found that party B also provides transportation service to party B for bringing goods from the go-down of B to the go-down of X.The party X also receives commission against carriage contract.However, no service tax is paid by X against commission received on carriage contract. Does the portion of the commission received against carriage contract falls under reverse charge mechanism. The party X is registered under BAS only.

AI Summary

Commission on Freight Services Subject to Service Tax Under Business Auxiliary Service; Reverse Charge Mechanism Applies A party 'X' provides services to another party 'B' by selling B's goods and receives a commission, on which service tax is paid under Business Auxiliary Service (BAS). Additionally, X arranges transportation for B's goods and receives a commission for this service, but no service tax is paid on this commission. The query is whether the commission from the carriage contract falls under the reverse charge mechanism. Respondents agree that the commission for freight should be included in BAS and taxed.