Financial Daily from THE HINDU group of publications
Monday, Apr 17, 2006
Financial Daily from THE HINDU group of publications Monday, Apr 17, 2006 |
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Mentor
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Taxation Industry & Economy - Excise and Customs Columns - At Your Service Getting overtaxed
I am running a Custom house agent business duly approved by the Customs. I incur a host of expenses — port trust charges, taxi charges, crane forklift charges, loading unloading charges, bank collection charges and customs duties — on behalf of my clients before the goods are cleared. The list is illustrative only. When I bill my customers I include all these charges and finally my service charges. I collect service tax only on my service charges and not on other miscellaneous charges. But the authorities after scrutinising my tax returns called for details and said that I should pay tax on the gross amount shown in my bill. Am I liable to pay on the gross amount? Secondly, in many cases my clients reduce the service charges claimed and pay only a lesser amount. And so, I end up paying more service tax. What is the remedy?
Ashok P, e-mail It is clarified that in relation to Custom house agency service, the tax will be payable on the gross amount shown in the service bill. However, the actual reimbursable amounts spent by you, such as Customs duty, port dues, bank collection charges, etc., can be excluded. Such exclusion will be permitted only when documentary proof for such expenses are provided. Many agents charge fees under heads such as attendance charges repacking charges, agency commission etc. When these are not supported by vouchers and are without clear evidence to the effect that these paid were to third parties and are reimbursable, the authorities will disallow any claim for deduction. Where the actual service charge received is lesser than the amount claimed in the bill the only way is to claim refund later. Initially the tax has to be paid on the basis of the bill. Subsequently if the client pays you a lesser amount, evidence relating to such payment is to be produced for claiming refund. Any such refund should be claimed within a period of one year from the date of payment of tax.
Send in your queries on Service Tax, Excise and Customs to MentorAtYourService@gmail.com.
S. MURUGAPPAN
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