Sales Tax Instructions

Sales Tax Instructions, 2009
(vi)
It is not clear as to how the value of ‗service‘ is
to be determined where the service is performed by an outside agency
and club is merely recovering the amount from the member on behalf of
the service provider. The recoverable amount is paid over to the service
provider either in full or alternatively after retaining a certain percentage
out of the total bill?
Ans.
The services provided by clubs for or on behalf of others
whether or not after retaining any amount from the total bill shall be
charged to sales tax on the basis of ‗total value‘, i.e., total billed amount
whether transferable to the principal in toto or after deduction.
Question No.4. The timing of service also needs elaboration as service is
performed over a period of time whilst an invoice/bill is usually raised on
completion of service?
Answer In case service is performed over a period of time and bill is to
be issued on completion of the service, time of supply shall be the time
when service is completed or payment (consideration in money) in
respect thereof is received, whichever is earlier. The provisions of
section 2(44) of the Sales Tax Act, 1990 defining ‗time of supply‘ shall
mutatis mutandis apply in this regard.
Question No.5. The application for registration and sales tax returns for
service provider is not available. Moreover, it is not clear whether a
separate registration would be required for persons who are either