Applicability of Service Tax
We have appointed a consultant for a period of 24 months for Job specific consultancy & advisory services.
The consultancy service charges is being made monthly.
Now whether this consultancy charges payable to the Consultants attracts Service Tax also apart from TDS ?
If yes what percentage.
E.g. If we are making a payment of Rs: 10,00,000/- PM towards consultancy services how much Service tax and TDS do we have to deduct from their Bill ?? Or what percentage the consultant can add to their bill towards Service Tax ?
Asked 1 year ago in Service Tax from Shillong, Meghalaya
Whether any Abatement rate or Exemption rate is allowed ?
Asked 1 year ago
With respect to your quarry please find below answer :
Service Tax shall be applicable to service provider and not to the service recipient except when you are a company and service provider is individual.
Hence in your case consultant will charge the service tax @ 14.5% if it is applicable on them.
In your example you only have to deduct TDS @ 10% on Rs. 1,00,000/- . No Service Tax if it is not a service by advocate. Consultant will add 14.5% after 15.11.2015 on the value of service. ( No abatement applied on the said category)
For further details please free to contact me.
Thanks & Regards
CA Vishrut Shah
Talk to Vishrut Rajesh Shah
4.8 on 5.0
As explained by you, it doesnt appear that your transaction is covered under Reverse Charge Mechanism and hence it is not your responsibility to deduct/ charge Service Tax. Your consultant may charge you Service tax @ 14% plus SBC @ 0.5% in his Bill.
You are required to deduct TDS @ 10% on his Consultancy Bill and pay it to the Government before the 7th of every month.
CA Rohit R Sharma
Talk to Rohit R Sharma
5.0 on 5.0