Pradeep Jain - Chartered Accountant

As per legal provisions, Service Tax is payable on gross amount charged for renting of immovable property less property tax actually paid to Municipality. For the half year ended on 30.09.2012, gross rent receivable is Rs. 30,00,000/- on which Service Tax @ 12.36% comes to Rs. 3,70,800/- which has been received / claimed from the tenant. But after taking rebate of Rs. 10,00,000/- on account of Property tax paid to Municipality from gross rent of Rs. 30,00,000/- , ‘A’ paid service tax of Rs. 2,47,200/- (i.e. 12.36% of Rs. 20,00,000/-) for the period under consideration. In other words, an amount of Rs.1,23,600/- is received in excess of actual service tax liabilities. You are request to kindly clarify the treatment of Service Tax received/ receivable in excess of ‘A’’s liability in books of account. Moreover, if the assessee has to pay excess service tax, what will be the treatment in future ??

You have to charge service tax after deducting property tax from service receiver and not on gross amount i.e. in invoice service tax should be charged on Rs. 2000000/- As per section 73A(2) of Finance Act,1994 “where any person who has collected any amount, which is not required to be collected, from any person, in any manner as representing service tax, such person forthwith pay the amount so collected to the credit of the Central Government.” So the above provision makes it clear that any amount collected from service receiver has to be paid in the credit of the Central Government. So in the instant case you have collected service of Rs. 370800/- instead of Rs. 247200/- but as per provision of Section 73A, you have to deposit service tax of Rs. 370800/- to government.

Sir, we are a taxpayer dealing in health care services. We have been making supply on which tax was payable by us but we have not paid the same erroneously. The same has been pointed out by department recently. Please suggest whether we have to pay interest and penalty along with tax.

As per sub-section (5) and (6) of Section 73 of CGST Act, if you have made payment of tax and informed the same to the department then the department ...
Sir We are dealing in trucks. We have received an export order from foreign buyer. We wish to procure trucks from 5 different manufacturers and supply them directly to the port without receiving on our own premises. Can we do the same to take benefit of merchant export by paying tax @ 0.1%.

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