Whether Service Tax Payable Considering Inclusive Bill or Exclusive?

[Vartik Choksi]

Sir/Madam,

I am a Service Provider and Have Drawn  the Bill on my Customer as Follws:

100 BAsic

10 Service Tax

2 E/C

1 SHEC

and Customer Pays me Rs/- 100 so shall i need to pay tax on 100 or assuming it to be inclusive pay 100*100/100= 90 and pay Service tax on Rs/-90 to the credit of CG.

Regards!!

[CA Rachit Agarwal]

As per Rule of Point of Taxations, 2011, you have to pay the tax as given in the bills.

As per the rule tax is payable earlier of

1. payment received

2. Bills Received.

However if final bills is 100, service tax =100*10.30%/(110.30%). According basic value is Rs. 90.66 and Service Tax is Rs. 9.34.

[NEERAJ KUMAR, RANCHI]

Dear Mr vartik

As Mr Rachit has suggested,  if you have raised bill on the basis of Rs. 100, you need to pay s tax on 100 only, however if you have received only Rs 100/- only inclusive of service tax you need to correct you bill, but this should be done within the prescribed limit as per the Point of Taxation Rule.

AI Summary

Service tax must be calculated on the billed amount per Point of Taxation Rules, 2011, unless corrected timely. A service provider inquired whether service tax should be calculated on an inclusive or exclusive basis when a customer pays only the base amount of a bill. The first respondent advised that, according to the Point of Taxation Rules, 2011, tax should be paid based on the billed amount. They calculated the basic value and service tax accordingly. The second respondent agreed, stating that if the bill is raised for Rs. 100, service tax should be paid on that amount unless the bill is corrected within the prescribed time limit if only Rs. 100 is received inclusive of tax.