Service tax query
MRIDUL BHARGAVA
(Querist) 06 January 2013
This query is : Resolved
An amount received from the government in installments by Public sector undertaking for implementing e-governance project in Govt. departments. PSU further assigns that work to specialized agency to execute the work. In this process, PSU earns some percentage as income like 5%.
Question :-
1. What is the service tax liability for PSU?
2. Whether Service tax is applicable on the Income part only or the gross receipt amount received from Govt.?
3. Service tax applicability at the time of receiving advance from Govt. or at the time of billing to sub-contractor.?
Thanks in advance!!!
Raj Kumar Makkad
(Expert) 06 January 2013
Better to obtain this information from the office of AGI as the matter is between govt. of India and a PSU.
MRIDUL BHARGAVA
(Querist) 06 January 2013
Thanks for your reply. Appreciate if you can share your opinion on this.
Raj Kumar Makkad
(Expert) 06 January 2013
There is no general exemption provided to Central/State Government Departments/PSUs. Government department whether Central or State have to pay Service Tax to the provider of the service from whom any of the specified services are received by the Government department/PSUs.
In view of above your PSU has to pay service tax to the provider of the service on the amount paid to him and not on the amount retained by you.
