As you are aware, effective from July 2012, the service tax payment structure has been revised, with 25% to be paid by the service provider and 75% by the service receiver (in the case of a manpower recruitment agency). Please advise me on how to calculate the service tax.
Thank you.
From India, Bangalore
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2Thank you.
From India, Bangalore
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Service Tax Amendments Effective from July 2012
In relation to the recent amendments in Service Tax, effective from 1/7/12 (amendment attached):
75% of the Service Tax amount shall be paid by the company, and the balance 25% shall be paid by the Service Provider. This is applicable to cases where the Service Provider is a Proprietor or a Partnership firm, not applicable to Pvt. Ltd.
If the service provider of manpower service is a proprietorship/partnership concern, then 25% of the Service Tax will be levied by them in their bill, and the balance 75% of the Service Tax shall be paid by the service receiver.
Example Calculation
For example:
Manpower service for July 12 - ₹1,00,000
Service Tax @ 12.36% * 25% - ₹3,090
Total - ₹1,03,090
The service receiver shall get themselves registered with Service Tax and shall pay 12.36% * 75% of ₹100,000 = ₹9,270.
Regards,
Kennady
Consultant - Labour Laws
Chennai
From India, Madras
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In relation to the recent amendments in Service Tax, effective from 1/7/12 (amendment attached):
75% of the Service Tax amount shall be paid by the company, and the balance 25% shall be paid by the Service Provider. This is applicable to cases where the Service Provider is a Proprietor or a Partnership firm, not applicable to Pvt. Ltd.
If the service provider of manpower service is a proprietorship/partnership concern, then 25% of the Service Tax will be levied by them in their bill, and the balance 75% of the Service Tax shall be paid by the service receiver.
Example Calculation
For example:
Manpower service for July 12 - ₹1,00,000
Service Tax @ 12.36% * 25% - ₹3,090
Total - ₹1,03,090
The service receiver shall get themselves registered with Service Tax and shall pay 12.36% * 75% of ₹100,000 = ₹9,270.
Regards,
Kennady
Consultant - Labour Laws
Chennai
From India, Madras
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Dear Kennady and Jeevaratnam, thanks for your revert. i think, so many vendor or clients don’t know regarding this. this topic will help them to know about revision in Service tax.
From India, Bangalore
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From India, Bangalore
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Clarification on Service Tax Components
1. One clarification regarding service tax: Since I was not aware of the 25% and 75% components, I have charged the full rate of 12.35% service tax as a service provider. Now, what should be done? Should I deposit all the service tax deducted to the government?
Client Payment and Service Tax Rate
2. One more clarification is required: If my client is ready to pay the full tax of 12.36%, should I still charge 25%, or can I charge the full tax on the bill?
Service Tax Registration and Payment Timing
3. My last question is this: I registered my firm with service tax on 6th July '13; should I deposit the service tax deducted in the month of June? What about the bills on which service tax was not charged?
From India
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1. One clarification regarding service tax: Since I was not aware of the 25% and 75% components, I have charged the full rate of 12.35% service tax as a service provider. Now, what should be done? Should I deposit all the service tax deducted to the government?
Client Payment and Service Tax Rate
2. One more clarification is required: If my client is ready to pay the full tax of 12.36%, should I still charge 25%, or can I charge the full tax on the bill?
Service Tax Registration and Payment Timing
3. My last question is this: I registered my firm with service tax on 6th July '13; should I deposit the service tax deducted in the month of June? What about the bills on which service tax was not charged?
From India
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As far as we know, the service tax has decreased from 12.36% to 3.09%. For the sake of argument, let's presume your calculations are correct. So, out of Rs 100,000, 12.36% would be Rs 12,360, out of which 75% is to be paid by the client, which amounts to Rs 9,270, and the remaining 25% by the service provider, which equals Rs 3,090. This totals Rs 12,360 out of Rs 100,000.
However, service providers who supply security guards have a different perspective. Similar to the way the client pays the service provider's share of the PF and ESI, they also expect the client to cover 25% of the service charges. Is this correct?
From India, Bangalore
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However, service providers who supply security guards have a different perspective. Similar to the way the client pays the service provider's share of the PF and ESI, they also expect the client to cover 25% of the service charges. Is this correct?
From India, Bangalore
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I have before me a document from the Government of India, Ministry of Finance (Department of Revenue) Notification No. 30/2012-Service Tax dated New Delhi, the 20th of June 2012. So, where did you get the date as July 01, 2012? Everything seems confusing as there are 10 different descriptions of services. Why this confusion in publishing a wrong date? [Email Removed For Privacy Reasons]
From India, Bangalore
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From India, Bangalore
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HI, I have a doubt. Do I have to collect 25% of 12.36 % from client or I have to pay that to government from my pocket ? Please clarify.
From India, Madras
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From India, Madras
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ST-Point of Taxation in Service Tax.doc
Service Tax.pdf