Income tax Tds & Ser Tax Liability

Querist : Anonymous (Querist) 19 May 2010 This query is : Resolved
Hello Sirs..Gd Evng..My Quesion is :My Client is Travel Agent as wel as Zerox Job worker. He get Cars from Local Owners as hire basis And Supplied to One Ltd.Co and earn some commission.Ltd co Deduct Income tax on Rs.13 lacs Total Payment Said Tax Rs.30,000..

Q.1.What is Accounting Treatment ?
Q.2.Service tax Liability Arise ?

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Vineet (Expert) 19 May 2010
Please clear some facts.

Is your client billing only for commission or the entire car rental.

Accounting treatment is simple. Tax deducted is TDS which your client can avail credit against the income tax liability.

Under given facts, service tax liability arises as gross billing more than 10 Lakhs for car rental services. Request other experts whether any exemption or abetment allowed in this matter.

Querist : Anonymous (Querist) 25 May 2010
Thanx sir,My client billing entire car rental.Can show in P & L a/c as "commission income" head insted of full amount debit and credit.

soumitra basu (Expert) 31 May 2010
Your client has to show the full rental as Gross Receipt in the credit side of the Profit and Loss Accounts. All the expenses including the car hire charges paid to outsider should be placed in the debit side. The Net Suplus is Net Income subject to taxation. The TDS can be claimed as pre-paid tax.
No service tax is payble since it is not a tourist vehicle.

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