Category - Liability of service tax, 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?

Posts / Replies

[Surender Gupta]

Your query itself is clear and I do not see any confusion. Taxable Category of the service is the same for "B" and "C" and both are liable to pay service tax. If they do not avail the exemption, the benefit of CENVAT credit would be available.