service tax applicability

[suman suman]

IF MR.A GIVEN RUPEES 10 CRORE TO MR .B FOR MAKING A FILM IN THAT 10 CRORE 5 CRORE IS FOR MAKING THAT FILM REMAINING 5 CRORE IS FOR MR.B REMUNERATION FOR JOB DONE. WHAT IS THE TAX IMPLICATION IN THE HANDS OF MR.B???? IS SERVICE TAX APPLICABLE TO HIM??? IF APPLICABLE ON HOW MUCH AMOUNT HE HAS TO PAY?? WHAT IS THE PERCENTAGE TO PAY???

[YAGAY and SUN]

B will raise a bill/invoice of ₹ 10 crore on A to charge service tax on entire amount.

[Ganeshan Kalyani]

Service tax is applicable on consideration received for service rendered. Here, ₹ 10 crores is received toward consideration for the service, by way of making film, is rendered, hence service tax is applicable. Thanks.

[KASTURI SETHI]

I support the views of both experts. As per Section 67, ST is leviable on gross amount charged. Pl. read Section 67 (i), & (3) of the Act and also definition of ''Consideration" below Explanation (a) of Section 67 of the Finance Act.

[Ganeshan Kalyani]

Thanks sir.

AI Summary

Service tax applicability: gross consideration for film production attracts service tax on the full billed amount.
Service tax applies to the entire consideration charged for film-production services; when a single consolidated payment covers both production costs and the service-provider's remuneration, the service-provider must invoice for the full amount and account for service tax on the gross amount charged, because the statutory definition treats the consolidated receipt as taxable consideration.