Service Tax Applicibility On Full & Final Amount - CiteHR
Arun Kumar Maitra
Presently Working As Company Secy. In Old
Consultant & G.m.
+3 Others

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Dear All,
Two days before one of our service tax consultant told to us that service tax will applicable on Full & Final amount of employee.
This is responsibility of employer to submit service tax on Full & Final amount.
Please suggest to me about this above mentioned matter.
with Thanks & Regards,
Community Prime Sponsors - Payroll Software with GPS Enabled Attendance, Travel, Performance Management, HRMS. "Interactive Anywhere Learning". Executive courses from top reputed institutes like IIM, XLRI, MICA.
As per amended service tax negative list, relation between employer & employee be end after resignation of employee and now employer works as a service provider to ex-employee. In that case, relation between employer & employee will be as a service provider and service receiver. So, Service tax applicable on Full & Final amount.
If you are doing the Full & Final Settlement of the employee for the services rendered by him before his resignation and relieving, then Service Tax is not applicable.
However, if the employee is working as an independent consultant / service provider then, service tax is payable by the Employee of he comes under the service tax limits.
If you need a proper opinion / advise on the matter, our legal team would be pleased to help you in the matter.
Kind Regards,
Avika Kapoor
Vice President - Operations
Mobile: 7503110330
Website: Kapgrow

If a person is working on contract basis as a Professional in a Ltd. Company and draws monthly professional fees amounting to Rs. 62,000/- after deduction of TDS,is he liable to pay service tax or obtain registration under the service tax act?
Dear Avika,
Your concern is right but only for outsource service provider , here i am talking about on roll employees who gives resign from his/her existing job and company will give his/her full & final amount after his/her resign.
Dear Ankur1,
ST. on final settlement to employee is not applicable. I think the final settlement what now being referred here is PF/Gratuity, leave encashment, bonus etc. is it not ? Then Your consultant is wrong. There is no "service provider" and "service receiver" relationship between employer & employee. Consultancy is different.
How to maintain the books of service tax? And what is the procedure from book keeping to return and e-filing, please explain in details.
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