Service tax is chargable on the service rendered to the customer/client. There is no service tax received by you / neither there is a bill prepared by the bank. thus there should not be any service tax on the deduction. The reason why bank is charging service tax MAY Be is that from last year service tax in chargeable on all service tax unless specifically excluded.... I think u can take up the matter and have a clear chance of proving yourself.
CA Vikas Goel
8th August 2014 From India, Mumbai
I would like to state that my employer had recovered service tax on 3 months notice period.Somehow i felt that i should not pay but i was left with no choice.
Also explanation for charging service tax on shortfall of notice period has been given that it is being mentioned clearly in "'Taxmann's Service Tax Ready Reckoner' by Shri V S Datey "
Also to clarify that my employer is a government organization.
23rd September 2014 From United States, Newark