Sales Tax/ VAT, TDS, Income Tax, Service Tax Queries Answered, FREE

Posted in Money & Finance on Thursday, April 19th, 2012

A business enterprise in India is subject to various types of taxation, both direct and indirect, depending on the type of business it is in. A few taxes that are common across the board, whether small or large business, are Income Tax, Service Tax, TDS, Sales Tax/ VAT.


In our continuous endeavour to help you succeed in your business venture, we at Intuit Small Business India, have introduced a new section that will make taxation matters easier to deal with. Introducing the FREE Tax Guidance, an exclusive service where you can ask all taxation related queries to our expert Chartered Accountants.


You can ask Questions via Facebook also.

In case you find Facebook easier to navigate, you can find the forum easily on the Intuit Small Business India page on FB. Click on the Free Tax Guidance tab and type in your question.


The salient features of this forum are

• It covers taxes such as Income Tax, Service Tax, Tax Deducted at Source (TDS) and Sales Tax/VAT.

• Our panel of CAs answer the queries, provide guidance within one working day.

• No Fees charged. This service is FREE.

• Questions can be kept confidential by simply sending it to the dedicated email



Peek into the tax related queries answered so far:


Q – What tax is applicable to music producers/music director?

o A – Music director/producer would certainly be subject to the Income tax, additionally, the activity is covered u/s.section 65(105) (zzzzt) of the Finance Act, 1994 for levy of service tax a copyrighted activity, hence, would also attract the service tax. Music producer Company, manufacturing CDs and DVDs or other media recorded with music would.


Q – Are CST @ 2% and excise duty a part of production cost or can be treated as input VAT credit??

o A – CST paid on purchase of goods is not available as Input Tax Credit, hence, should be treated as a part of production cost, whereas, Excise Duty paid on purchase of raw materials can be claimed as CENVAT credit while paying Excise Duty on final product, hence, should not be considered as a part of production cost, if the final product manufactured by the unit is subject to Excise Duty.


Q – Service Tax – Transportation Service – I am transport service provider, whether service-tax is applicable to it? If yes, at what rate?

o I presume, it is Transport of Goods by Road Service. Yes, it is subject to Service Tax u/s.65(105)(zzp) of the Finance Act, 1994. An abatement @75% is available, hence, the service tax would be charged on 25% of the Gross amount charged from customer. Presently, the Service Tax rate is 10% plus 2% education cess and 1% SAH education cess, making it 10.30%, hence, effective service tax on the said service comes to 2.575% (25% of 10.30%) upto Mar 31, 2012. As the Service Tax rate has increased to 12% wef April 1, 2012, the effective rate would be 3.09% (25% of 12.36%) from 2012-13.


Intuit Small Business India’s Tax Guidance forum is user-friendly, business-centric and has been made for the benefit of small and medium businesses in India. Go ahead and ask as many questions that you may have.

This entry was posted on Thursday, April 19th, 2012 at 6:10 am and is filed under Money & Finance. You can follow any responses to this entry through the RSS 2.0 feed.

  • Amit Rathore

    I want to know about vat,tds ,cst,esi,pf,income tax

  • Bhargavi PrintoGraph

    my friend had taken a railway labour contract of house kepping last year through open tender.
    in his quote he hadnt mentioned anything about service tax and he didnot charge it to railways either at the final billing .
    at the end of the the completion of the tender, the railway audit have cut the relevant service tax amount from his bill and passed the balance amount for payment.
    is the contractor liable to pay for the service tax for which he has not charged to the customer?

  • Bhargavi PrintoGraph

    labour contracts of railways ( even above inr20lakhs) are exempt from service tax ?

  • Ashwini Kumar Kundan

    A contractor purchased goods paying VAT and supplied the same to a government office. May government office levy Income Tax while making payment to the contractor.

  • Rajib Lochan Das

    We are running a Language academy in Delhi on sole proprietorship. We have registered for Service Tax in FORM ST2 dated 06.12.2012

    Our Annual turnover is around less than Rs 5 lakhs.

    How to apply for Service tax Exemption to Central Board of Excise & Customs (CBEC)?
    Please guide us.

    Rajib Lochan Das.

  • khanam

    service tax & vat are exempted in income tax for purchasing new under construction flat

  • Sathish Raj

    My understanding of TDS deduction on rent 194I is as follows. Rent of September paid in October needs to be TDS deducted and remitted to Government account before 7th day of November and likewise for October rent paid in November, TDS deducted and remitted in December. My query is 1. Is my understanding correct. 2. If the above is correct then which are the correct months for TDS returns in the 3rd quarter, are they the rental months, rent paid months or the TDS amount paid to Gov’t months ?

  • Sathish Raj

    I have a beauty parlour services business in Kerala where some retail branded cosmetics are also sold which amounts to less than 5.0 Lakh sale per annum. Am I required to register under KVAT. If not registered how can i bring material for sales without TIN number. Please advise

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