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TMI BlogService Tax Basic ExemptionX X X X Extracts X X X X X X X X Extracts X X X X ..... Service Tax Basic Exemption X X X X Extracts X X X X X X X X Extracts X X X X ..... ract Service during the year = ₹ 30,00,000/- Which of the following method should be used for calculating service tax liability 1. (30,00,000-10,00,000) x 40% x 12.36% = 98,880/- or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. [(30,00,000 *40%) - 10,00,000 ] x 12.36% = 24,720/- Kindly guide in this matter at earliest if this is first year of business. Thanks. Reply By Deepak Aggarwal: The Reply: Dear Hima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nshu ji, In my opinion, first method will work- (30,00,000-10,00,000) x 40% x 12.36% = 98,880/-. Thanks Reply By Deepak Aggarwal: The Reply: Dear Himanshu ji, Please ignore earlier reply. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Correct position will be as per second method i.e. [(30,00,000 *40%) - 10,00,000 ] x 12.36% = 24,720/-. Reason is that works contract service is covered by valuation rules. Valuation rules sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecifies that only 40% will be taxable value in case of Works contracts. So, first taxable value will be calculated and then basic exemption will be deducted.
Hope it will clarifies.
Thanks X X X X Extracts X X X X X X X X Extracts X X X X ..... iscussion Forum - Knowledge Sharing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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