Service Tax on legal expenses

[Ravindra Gajelli]

Dear Sir,

 

I would like to know How the service tax department keep a track of service tax of legal service provider who is not liable to pay service tax but 100%by the service recipient. What is if the service recipient forgot to pay the service tax on such services. How the government reconcile such situation.

[YAGAY andSUN]

The Government Official may seek information from your Books of Accounts, Bank Statement, Profit and Loss account, List of litigations, and from your Balance Sheet.

It is advisable to pay service tax honestly.  Be proactive and reconcile your accounts on your own even before department's audit etc.

AI Summary

Legal Service Tax Monitoring: Compliance Checks via Financial Records for Recipient-Paid Taxes A query was raised about how the service tax department monitors service tax payments for legal service providers who are exempt from paying but whose service recipients are responsible for the tax. Concerns were expressed about what happens if the recipient fails to pay. The response advised that government officials may review financial records such as books of accounts, bank statements, and balance sheets to ensure compliance. It is recommended to pay service tax diligently and proactively reconcile accounts to avoid issues during audits.