vocational training

[Guest]

Hi all,

I have a query regarding the service tax, it would be of great help if i get an expert advise regarding the same. Am writing on behalf of my brother, well he took admission in frankfinn institute on 06/07/2009 and paid the last installment of his fees on 24/07/2010. I would like to know whether do we need to pay the service tax either on course fee or the last installment. please communicate your views regarding the same.

Thanks in advance,

kind regards,

pooja

[NEERAJ KUMAR, RANCHI]

Dear Puja,

As far as I could understand your query,  I try to answer:

Before point of taxation rule being effective service tax was to be paid on the amount received by the service provider and not on the billed amount. In your case if a payment was made in different installment, please chek the bill/invoice raised by the service provider, if service tax was charged on that part of installment only which was paid, or on the full amount, If the institute has taken some installments eralier and not charged service tax and charged the whole amount of service tax with the last installment, it is wrong on his part and the service tax department may take suitable action against him.

[YAGAY andSUN]

Service tax is applicable on this taxable service as and when paid in full or in installments.  If the service provider had not charged during the period of providing taxable services, then, Department may raise objections in this regard.  However, you are liable to pay the service tax to the service provider.  For this, the service provider is liable to charge in it's bills.

AI Summary

Service tax on vocational training arises on instalments as received; providers must charge tax in each instalment bill. Service tax on vocational training fees is chargeable on amounts actually received; when fees are paid by instalments the tax arises as and when each instalment is received. The provider must charge service tax in the bill corresponding to each instalment, and aggregating untaxed instalments to levy tax only on a later payment is improper and may invite departmental action. The recipient is liable to pay service tax as charged, contingent on proper invoicing by the provider.