TaxTMI 
TaxTMI 
TaxTMI 
Category - Liability of service tax
Vijay Chitte
'A' contract with 'B' that, 'B' is providing a service in the fields of arrangement of traveling facility to 'A'. For that 'B' availed services from 'C' (Other travel agency) for hiring a Car/Motor car for providing service to 'A'. Now 'C' raise the bill to 'B' Rs.10490/- in the following manner. Amount Rs.10490/- [10000 + 490 (4.9% Service tax) =10490] B' paid this amount to 'C'. And last, B raise this bill to A including of his margin of Rs.1000/- in the following manner. Gross Amount Rs.11000/- (10000+1000) + Rs. 1346/- (12.24% Service tax) = Rs.12346/- My query is: As per above activity is laible to service tax for “B” ? If yes, under which category of service?
Clarifying Service Tax Liability: 'B' and 'C' both liable under same service category; CENVAT credit available if no exemption. A discussion on service tax liability involves a contract where 'B' arranges travel services for 'A' by hiring a car from 'C.' 'C' bills 'B' Rs. 10,490, including a 4.9% service tax. 'B' then bills 'A' Rs. 12,346, incorporating a 12.24% service tax and a Rs. 1,000 margin. The query asks if 'B' is liable for service tax and under which category. The response clarifies that both 'B' and 'C' are liable for the same taxable service category, and if no exemption is availed, they can benefit from CENVAT credit. (AI Summary)