C.A.

FINAL IDT

Question 1
Nihal Industries Ltd. manufactured components for a lathe. The component was supplied to Moon
Industries, who were manufacturers of the lathe. Moon Industries supplied dyes free of cost for
manufacture of the component to Nihal Industries Ltd. Cost of dies was ₹ 10,00,000. As per technical
estimate, 20,000 components could be manufactured out of the tooling. In addition, Nihal Industries
Ltd. purchased tools on their own at ₹ 1,00,000 for manufacture of the components. Estimated life of
the tool was 25,000 components. These tools were capitalised by Nihal Industries Ltd. Ltd. in their
books of account. Nihal Industries Ltd. supplied 5,000 components to Moon Industries for ₹ 190 per
piece exclusive of taxes and duties, during first year of production. In addition, they charged Dharmada
(charity) of ₹ 10 per piece separately. This Dharmada amount was given by Nihal Industries Ltd. for
donation to a Charitable Organisation. Excise Duty rate was 12.5%.
Calculate the assessable value and the excise duty payable for the year.
Solution:
Assessable value -
Cost to Moon Industries = 190/piece
Add: The amortised cost of dyes = 50/piece (10,00,000/20,000)
Add: Dharmada (Charity) = 10/piece
Thus, assessable value = ₹ 250/piece (190 + 10 + 50)
Hence, total assessable value (5,000 x 250) = 12,50,000
Excise duty @ 12.5% = ₹ 1,56,250

Question 2
Determine the amount of CENVAT credit available with Nihal Manufacturing Ltd. in respect of the
following items procured by them in the month of July, 2016:
S. No. Item Excise Duty
Paid (₹)
(i) Raw materials used in the factory of Nihal Manufacturing Ltd. 72,000
(ii) Goods used in the guest house primarily for the stay of the newly recruited
employees 40,000
(iii) Inputs used for making structures for support of capital goods 1,25,000
(iv) Capital goods used as parts and components for use in the manufacture of
final product 40,000
(v) Capital goods for use in the manufacture of final product. The value per
piece of such capital goods is ₹ 10,000. No. of pieces – 50 62,500
(vi) Capital goods for use in the manufacture of final product. The value per
piece of such capital goods is ₹ 12,000. No. of pieces – 50 75,000

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Solution: Computation of CENVAT credit available with Nihal Manufacturing Ltd. (amt. in ₹):
Raw materials used in the factory of Nihal Manufacturing Ltd. 72,000
Goods used in the guest house primarily for the stay of the newly recruited employees
(WN 1) Nil
Inputs used for making structures for support of capital goods (WN 1) Nil
Capital goods used as parts & components for use in the manufacture of final product
(WN 2) 40,000
Capital goods for use in the manufacture of final product. The value per piece of such
capital goods is ₹ 10,000. No. of pieces – 50 (WN 3) 62,500
Capital goods for use in the manufacture of final product. The value per piece of such
capital goods is ₹ 12,000. No. of pieces – 50 (WN 4) 37,500
Total CENVAT credit available 2,12,000
Working Notes:
(1) As per the definition of inputs, there is specific exclusion with regard to the following:
(a) goods used in a guest house when the same are used primarily for personal use or
consumption of any employee.
(b) goods used for making of structures for support of capital goods.
Thus, CENVAT credit cannot be claimed in respect of the above goods.
(2) Though definition of inputs specifically excludes capital goods, capital goods used as parts or
components in the manufacture of a final product are included therein. Thus, CENVAT credit
will be available on the same.
(3) All capital goods having value up to ₹ 10,000 per piece are being included in the definition of
inputs. Hence, whole credit on such capital goods in the same year in which they are received.
(4) Since the value per piece of the capital goods exceeds ₹ 10,000 per piece, hence, the same shall
be eligible for credit as Capital goods. CENVAT credit of only upto 50% of the excise duty paid
is available in respect of the eligible capital goods in the year of purchase.

Question 3
XYZ India Ltd. is engaged in the manufacture of some dutiable goods. It purchased the following goods
in the month of September, 2016:
S. No. Item Excise Duty
Paid (₹)
(i) Raw material used for the production of the final product 2,50,000
(ii) Goods used for generation of electricity for captive consumption 40,000
(iii) Goods used for providing free warranty – Value of such free warranty
provided by XYZ India Ltd. is included in the price of the final product and is
not charged separately from the customers 15,500
(iv) Light diesel oil 5,000
(v) Goods used for pumping of water for captive use 12,500
Compute the amount of CENVAT credit available with XYZ India Ltd.

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Solution: Computation of CENVAT credit available with XYZ India Ltd. (amt. in ₹):
Raw material used for the production of the final product 2,50,000
Goods used for generation of electricity for captive consumption (WN 1) 40,000
Goods used for providing free warranty (WN 2) 15,500
Light diesel oil (WN 3) Nil
Goods used for pumping of water for captive use (WN 4) 12,500
Total CENVAT credit available 3,18,000
Working Notes:
(1) As per the definition of inputs, goods used for generation of electricity for captive consumption
are eligible inputs.
(2) Since the value of the free warranty provided by PQR India Ltd. is included in the price of the
final product and is not charged separately from the customer, the goods used for providing
such free warranty will be inputs eligible for the CENVAT credit.
(3) As per the definition of inputs, there is specific exclusion with regard to light diesel oil. Thus,
CENVAT credit cannot be claimed in respect of the said goods.
(4) As per the definition of inputs, goods used for pumping of water for captive consumption are
eligible inputs.

Question 4
S. No. Services billed Service tax SBC KKC
paid (₹) (₹) (₹)
(i) Sales promotion services 1,68,000 6,000 6,000
(ii) Market research for the new car launched by Maruti
Motors Ltd. 56,000 2,000 2,000
(iii) Quality control services 84,000 3,000 3,000
(iv) Routine maintenance of the cars manufactured by
Maruti Motors Ltd. 70,000 2,500 2,500
(v) Insurance of the cars manufactured 35,000 1,250 1,250
(vi) Outdoor catering services provided to the employees 56,000 2,000 2,000
Solution: Computation of CENVAT credit available with Maruti Motors Ltd. (amt. in ₹):
Services billed Service Tax
Sales promotion services (WN 1) 1,68,000
Market research for the new car launched by Maruti Motors Ltd. (WN 1) 56,000
Quality control services (WN 1) 84,000
Routine maintenance of the cars manufactured by Maruti Motors Ltd. (WN 2) 70,000
Insurance of the cars manufactured (WN 2) 35,000
Outdoor catering services provided to the employees (WN 3) Nil
Total CENVAT credit available 4,13,000

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Working Notes:
(1) As per the definition of the input services, there is a specific inclusion with regard to the
following services:
(a) Sales promotion services
(b) Market research services
(c) Quality control services
Hence, the CENVAT credit of the service tax paid on the aforesaid services is available.
(2) Service of general insurance business and repair and maintenance, in so far as they relate to a
motor vehicle which is not a capital goods, is excluded from the definition of the input service
except when used by a manufacturer of a motor vehicle in respect of a motor vehicle
manufactured by such person.
Thus, credit of the service tax paid on the insurance and maintenance of cars manufactured by
Maruti Motors Ltd. is available.
(3) Outdoor catering services to the employees are specifically excluded from the definition of the
input services. Hence, CENVAT credit of service tax paid on such services is not available.
(4) No Credit is allowed of SBC paid on input services.
(5) No CENVAT Credit is allowed of KKC paid on input services to manufacturer of final product.
Hence, Maruti Motors Ltd. will not be entitled to take CENVAT credit of KKC.
Question 5
M/s Rustomjee Manufacturers & Exporters Pvt. Ltd. furnishes following information and requests you
to compute the maximum refund eligible under Rule 5 of CENVAT Credit Rules for the relevant period
(amounts in ₹):
(i) Total CENVAT Credit taken on inputs 2,50,000
(ii) Amount of CENVAT credit reversed under Rule 3(5C) 50,000
(iii) Total CEN VAT Credit taken on input services 80,000
(iv) Total CEN VAT Credit taken on capital goods 2,00,000
(v) Value of final products exported without payment of duty 6,00,000
(vi) Value of goods cleared for home consumption 20,00,000
(vii) Amounts received towards services exported (includes ₹ 50,000 of advance
towards services to be provided/exported after the current relevant period) 2,50,000
(viii) Value of other services provided 2,00,000
(ix) Value of inputs removed as such under Rule 3(5) 30,000
Solution: Computation of maximum refund eligible u/s 5 of the CENVAT Credit Rules, 2004: (₹)
(i) NET CENVAT Credit taken = CENVAT credit on inputs & input services – Credit
reversed under Rule 3(5C) (Note that credit of capital goods is not included) 2,80,000
(ii) Export turnover of goods (only goods cleared without payment of duty
are included) 6,00,000
(iii) Export turnover of services (advance received towards services to be
provided/exported after the current relevant period shall not be included, hence: ₹
2,50,000 – ₹ 50,000) 2,00,000
(iv) Total Turnover:
Total of all excisable goods (exports + dutiable) ₹ 26,00,000
Export turnover of services (as computed above) + Value of other services ₹ 4,00,000
Value of inputs removed as such under Rule 3(5) ₹ 30,000 30,30,000
(v) Maximum refund = [(Item (ii) + Item (iii)) ÷ Item (iv)] × Item (i) 73,927

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Question 6
HDFC Bank provides the following information for the month of July, 2016:
CENVAT Credit available on Inputs ₹ 2,00,000
Service tax (including SBC and KKC) on Inputs Services ₹ 4,50,000
Value of taxable services ₹ 70,00,000
Value of exempted services ₹ 30,00,000
Determine the amount of CENVAT Credit available to HDFC Bank for the month of July, 2016 in view of
Rule 6(3B) of CNAT Credit Rules, 2004. Also determine the net service tax liability of the bank after
availing the eligible CENVAT Credit.
Solution:
According to Rule 6(3B) of CENVAT Credit Rules, 2004, a banking company and a financial institution
including a non-banking financial company, engaged in providing services by way of extending
deposits, loans or advances, in addition to options given in Rule 6(1), (2) and (3), shall have the option
to pay for every month an amount equal to 50% of the CENVAT credit availed on inputs and input
services in that month.
In view of above statutory provisions, CENVAT Credit available to bank for the month of July, 2016 and
its net service tax liability will be computed as under -
 Option I: In case the bank opts for Adhoc reversal: (amount in ₹)
Particulars Service Tax SBC @ KKC @ Total
@ 14% 0.5% 0.5%
Value of taxable service – ₹ 70,00,000 9,80,000 35,000 35,000 10,50,000
7% of value of exempted services u/s 6(3)(a) of the
CENVAT Credit Rules, 2004. (The amount of reversal
cannot exceed the sum total of opening balance of
the credit of input and input services available at the
beginning of the period to which the payment relates
and the credit of input and input services taken
during that period. (7% of ₹ 30 lakhs or ₹ 6,35,000
whichever is less) 2,10,000 - - 2,10,000
Sub-total 11,90,000 35,000 35,000 12,60,000
Less: CENVAT credit on inputs & input services 6,20,000 - 15,000 6,35,000
Sum payable through electronic banking 5,70,000 35,000 20,000 6,25,000
 Option II: Restriction of CENVAT credit on inputs and input services to the extent of 50%:
(amt. in ₹)
CENVAT Credit available on inputs 2,00,000
Less: Payment of 50% of CENVAT Credit available on input by virtue of Rule 6(3B).
It effectively means 50% of available CENVAT Credit is to be disallowed. 1,00,000
Net CENVAT Credit available on Inputs 1,00,000
CENVAT Credit available on input services (excl. SBC) (₹ 4,50,000 × 14.5% ÷ 15%) 4,35,000
Less: Payment of 50% of CENVAT Credit available on input services by virtue of
Rule 6(3B). It effectively means 50% of available CENVAT Credit is to be disallowed 2,17,500
Net CENVAT Credit available on input services 2,17,500

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Determination of Net Service Tax Liability of HDFC Bank for the month of July, 2016 (amt. in ₹):
Particulars Service Tax SBC @ KKC @ Total
@ 14% 0.5% 0.5%
Service tax liability of bank before availing eligible
CENVAT Credit on taxable services of ₹ 70,00,000 9,80,000 35,000 35,000 10,50,000
Less: Net/Eligible CENVAT Credit available on inputs 1,00,000 - - 1,00,000
Less: Net/Eligible CENVAT Credit available on
input services 2,10,000 - 7,500 2,17,500
Net Service Tax liability of bank after availing 6,70,000 35,000 27,500 7,32,500
eligible CENVAT Credit
The bank must opt for Option I [Adhoc reversal as per provisions of Rule 6(3)], since its service tax
liability will be less as per this option.
Question 7
Mr. Raj, a service provider of taxable as well as exempted services, furnishes the following information
for the month of September 2016 -
(a) Value of taxable services provided: ₹ 100 lakhs;
(b) Value of exempted services provided: ₹ 80 lakhs; (out of which value of activities not covered in the
definition of service as per provisions of section 65B(44) of the Finance Act, 1994 is ₹ 15 lakhs)
(c) CENVAT credit taken of common input and input services used for provision of exempted services,
taxable services and activities not covered in the definition of service: ₹ 4 lakhs. The opening balance
of CENVAT Credit of common input and input services on 01-09-2016 was ₹ 1 lakh.
Compute the amount payable by Mr. Raj month of September, 2016.
Solution:
Since Mr. Raj does not maintain separate accounts for receipt/consumption of common input and
input services, he will fall under Rule 6(3) of CENVAT Credit Rules. Accordingly, he will be liable to pay
7% of the value of exempted services and activities not covered in service. However, the amount
payment cannot exceed the sum total of opening balance of the credit of input and input services
available at the beginning of the period to which the payment relates and the credit of input and input
services taken during that period.
Therefore, the amount payable by Mr. Raj for the month shall be –
Particulars Service Tax SBC @ KKC @ Total
@ 14% 0.5% 0.5%
Value of taxable services (₹ 100 lakhs) 14.00 0.50 0.50 15.00
7% of value of exempted services including
activities not covered in the definition of service.
The amount of reversal cannot exceed the sum total
of opening balance of the credit of input and input
services available at the beginning of the period to
which the payment relates and the credit of input
and input service taken during that period. [7% of ₹
80 lakhs subject to maximum of ₹ 5 lakhs] 5.00 - - 5.00
Total 19.00 0.50 0.50 20.00
Less: CENVAT credit of input and input services 5.00 - - 5.00
Less: CENVAT credit of input and input services 14.00 0.50 0.50 15.00

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Question 8
PQR Ltd. cleared goods assessable value ₹ 50 lakhs in the month of November 2016 which were
provisionally assessed to duty under Rule 7 of Central Excise Rules, 2002 @ 6%. PQR Ltd. deposited
duty amounting ₹ 3 lakhs on 6.12.2016. PQR Ltd. voluntarily paid duty of ₹ 1 lakh on 21.1.2017. The
final duty is assessed on 15.2.2017 amounting ₹ 6.25 lakhs @ 12.5%, which is paid on the same date.
Calculate the interest liability under Rule 7 of Central Excise Rules, 2002.
Solution:
As per Rule 7(4) of the Central Excise Rules, 2002, the assessee shall be liable to pay interest on any
amount paid or payable on the goods under provisional assessment, but not paid on the due date
specified under Rule 8(1) and the first proviso thereto, as the case may be, @ 15% p.a., for the period
starting with the first day after the due date till the date of actual payment, whether such amount is
paid before or after the issue of order for final assessment.
Thus, the interest liability shall be calculated as under:
Voluntary payment Final payment
on 21.1.17 on 15.2.17
Duty paid 1,00,000 2,25,000
Due date of payment of duty 6.12.2016 6.12.2016
Interest period ends on the date of payment of duty 21.1.2017 15.2.2017
No. of days for which interest payable 46 71
Rate of interest notified u/s 11AA of the Central Excise 15% 15%
Act, 1944
Interest Liability 1,890 6,565
Question 9
Briefly examine whether the following activities are liable to service tax as per the provisions of
Finance Act, 1994.
(1) Mr. Shaan, a singer performs in a bus where passengers drop some coins in his bowl kept,
either after feeling rejoiced or out of compassion. Also, examine would your answer be
different if Mr. Shaan is called to Mumbai to perform in an award show for ₹ 2,50,000.
(2) Mr. Sanju during long drive with his wife Manju violated traffic rules and was imposed a fine of
₹ 1,000.
(3) Mr. Mahesh is a director employee of a company. He has given a guarantee on behalf of the
company for which the company has given him guarantee commission of ₹ 5,000. The same
was not in course of employment.
(4) Mr. Nihalchand is a Member of Legislative assembly. He has given his commercial property on
rent at ₹ 25,000 p.m.
(5) Mr. Ram has filed an appeal to High court and has paid filing fees of ₹ 1,500.
(6) Mr. Naresh engaged in providing commercial coaching to candidates of Chartered Accountancy course.
He received a non competing fees of ₹ 15,000 for not carrying out any such commercial coaching.
(7) Mr. Suresh an advance of ₹ 50,000 to Biyani Resorts Ltd. for booking of resort for marriage of
his daughter. Due to unforeseen circumstances the marriage was postponed and Biyani Resort
Ltd. forfeited the advance money as per the terms of agreement.
(8) Mr. Nihal is a Chartered Accountant employed with Reliance Ltd. He has been given an
assignment of valuation of answer books of IPCC exams by ICAI for a consolidated sum of ₹
15,00,000.
(9) Free seminar to educate about prudent investment indirectly promoting a mutual fund.
(10) Life time award received by artist in consideration for life time contribution.
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Solution:
As per the provisions of Finance Act, 1994-
(1) Mr. Shaan is not liable to tax as service tax is leviable on the services provided or to be
provided for a consideration. Mr. Shaan has performed an activity without consideration and
any activity without consideration does not come within the ambit of definition of “service”. In
this case passengers are under no obligation to pay any amount for listening to him nor have
they engaged him for his services.
If Mr. Shaan called to Mumbai to perform in an award show for ₹ 2,50,000, then this activity
would come within the ambit of definition of ‘service” as it becomes an activity for a
consideration. Resultantly, this activity would be liable to service tax.
(2) Service tax is not leviable in this case as in order to be service, an activity has to be carried out
for a consideration. Therefore, fine being the legal consequence of Mr. Sanju’s action is not in
the nature of consideration for an activity.
(3) In this case Mr. Mahesh has given guarantee on behalf of the company, which was not in the
course of his employment, hence such activity amounts to service. Such activity will be liable to
service tax. In this case company will be liable to pay service tax on reverse charge basis.
(4) In this case Mr. Nihalchand will be liable to pay service tax. If a Member f State Legislative
receives any consideration in performing the functions of that office as such member, service
tax is not leviable. The services of giving immovable property on rent will be liable to service
tax as the said activity is not performed in capacity of Member of Legislative Assembly.
(5) Fees taken in any Court or tribunal established under any law for the time being in force is
outside the coverage of ‘service’. Hence, on the filing fees service tax shall not be leviable. No
tax on ₹ 1,500.
(6) Any amount paid for not carrying out a competing business would be liable to be taxed as it
would be considered as being paid for providing the service of forbearance to act. Hence, non
competing fees of ₹ 15,000 received by Mr. Naresh be liable for service tax.
(7) Since service becomes taxable on an agreement to provide a service such forfeited deposits
would represent consideration for the agreement that was entered into for provision of service.
Hence, the amount of ₹ 50,000 forfeited by Biyani Resort Ltd. will be liable to service tax.
(8) Mr. Nihal is engaged in evaluation of answer books not in capacity of employee. Hence, the
consideration received for evaluation of such answer books will be liable for service tax.
(9) Since in this case the direct link between activity and consideration is missing therefore, it does
not constitute service.
(10) To constitute service, there should be an immediate and not remote connection between activity
and consideration. Consideration may actually be payable at a later point of time but linkage should
be immediate. Here, there is no immediate connection and therefore it is not a service.
Question 10
SDMA Ltd. of Delhi, engaged in various business has provided the following services in the month of
June 2016, whose values are listed below. Compute its service tax liability:
(1) Service interior decoration in respect of immovable property located in Jammu: ₹ 5 lakh;
(2) Service of renting of commercial buildings in Delhi: ₹ 15 lakh;
(3) Professional services of valuation immovable properties [vide a single contract for a
consolidated consideration] to Mumbai based TATA Industries Ltd. in respect of its four
properties located in Delhi, Kashmir, Kolkata and London. It is assumed that XYZ Ltd.
performed 20%, 30%, 15% and 35% of his total services in foregoing four cities respectively:
₹ 20 lakhs;

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(4) Architectural services to an J.W. Marriot which has business establishment in Mumbai for its
newly acquired property in Sydney: 25 lakh;
(5) Services provided as an Indian agent undertaking marketing in India of goods of a foreign
seller: ₹ 15 lakh;
(6) Services provided as travel agent undertaking marketing in India of services of a foreign seller:
₹ 1 lakh;
(7) Service of giving aircraft on hire upto a period of one month to Ltd. of .Jammu: ₹ 1 lakh;
(8) Service of giving yachts on hire upto a period of one month to XYZ Ltd. of Jammu: ₹ 1 lakh;
(9) Other services provided: ₹ 4 lakh to persons located in Srinagar, ₹ 2 lakh to persons located in
US and ₹ 15 lakh to persons located in Delhi.
Solution:
The taxable value and service tax is computed below (amount in ₹)
(1) Service of interior decoration in respect of immovable property located in Nil
Jammu: As per Nil Rule 5 of POPOS Rules, 2012 in respect of services provided
directly in relation to immovable property, the place of provision will be
location of immovable property. Therefore, in the given case, the place of
provision of service will be Jammu which falls in non-taxable territory and thus
this service will not be taxable.
(2) Service of renting of commercial buildings in Delhi: As per Rule 5 of POPOS 15,00,000
Rules, 2012 in 15,00,000 respect of services provided directly in relation to
immovable property, the place of provision will be location of immovable
property. Therefore, in the given case, the place of provision of service will be
New Delhi which falls within the ambit of taxable territory and thus this service
will be taxable.
(3) Professional services of valuation of immovable properties: As per Rule 7 20,00,000
of POPOS Rules, 2012 if services referred in Rule 5 (location specific service) is
provided at more than one location, including a location in the taxable
territory, its place of provision shall be the location in the taxable territory
where the greatest proportion of the service is provided.
Here, percentage of services performed in London and Kashmir will be ignored
for determining place of provision of service because London and Kashmir falls
in non-taxable territory.
Thus, comparison has to be made between location of Delhi and Kolkata. Since
in the present context, the greater proportion 20% of services is performed in
Delhi, place of provision of services will be Delhi. As a result, such services will
be subject to tax.
(4) Architectural services to an J.W. Marriot which has business 25,00,000
establishment in Mumbai) for its newly acquired property in Sydney: If
Rule 5 (Property rule) were to be applied, the place of provision would be the
location of the property i.e. Sydney (outside the taxable territory).
However, as per Rule 8, since both the provider and the receiver are located in
taxable territory, the place of provisions would be the location of the service
receiver i.e. Mumbai. Place of provision in the taxable territory, the service
would be taxable in India.

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(5) Services provided as an Indian agent undertaking marketing in India of 15,00,000

goods of a foreign seller: As per Rule 9, the place of provision of
intermediaries of goods is the place of location of service provider. Since
service provider. Since service provider SDMA Ltd. is located in Delhi (taxable
territory), hence, these services will be taxable.
(6) Services provided as travel agent undertaking marketing in India of 1,00,000
services of a foreign seller: As per Rule 9, the place of provision of
intermediaries is the place of location of service provider. Since service
provider SDMA Ltd. is located in Delhi (taxable territory), hence, these services
will-be taxable.
(7) Service of giving aircraft on hire upto a period of one month to XYZ Ltd. of Nil
Jammu: The place of provision of service will be outside the taxable territory
since the same falls under Rule 3 of the POPOS Rules, 2012. Rule 9 of POPOS
Rules, 2012 will not be applicable since services of giving aircraft on hire has
been specifically excluded in Rule 9.
(8) Service of giving yachts on hire upto a period of one month to Ltd. of 1,00,000
Jammu: The place of provision of service will be in Delhi i.e. the taxable
territory since the same falls under Rule 9 of the POPOS Rules, 2012, Rule 9 of
POPOS Rules, 2012 is applicable since services of giving yachts on hire upto a
period of one month has been specifically included in Rule 9.
(9) Other services provided: For other services, general rule 3 provides that the 15,00,000
services will be taxable at the place of location of recipient. Hence, service
where recipient is located in US and Srinagar shall not be taxable; while
services provided to recipient located in Delhi are taxable.
Total Taxable Value 92,00,000
Service tax @ 14% 12,88,000
Add: SBC @ 0.5% 46,000
Add: KKC @ 0.5% 46,000
Total Service Tax (including SBC & KKC) 13,80,000

Question 11
MG Ltd. of Mumbai (having diversified business) has provided following services, whose values are
listed below. Compute its service tax liability for month of January 2017:
(1) Services provided to a company located in USA in relation to organization of a sport event in
USA: ₹ 12 lakhs;
(2) Services provided to a company located in Srinagar in relation to festival celebration in
Srinagar: ₹ 3 lakhs;
(3) Services provided to a company located in Goa in relation to fashion show in Dubai: ₹ 12 lakhs;
(4) Services of online database access and retrieval services provided from its website to customers: ₹
25 lakhs (out of this, ₹ 20lakhs was provided to recipients located outside India).

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Solution:
The taxable value and service tax is computed below (amount in ₹)
(1) Services provided to a company located in USA in relation to Nil
organization of a sport event in Colombo: As per Rule 6 of the POPOS Rules,
2012, in case of services provided in relation to organization of events, the
services shall be taxable at the place of location of event. Since event is held in
non-taxable territory, it is not liable to service tax.
(2) Services provided to a company located in Srinagar in relation to festival Nil
celebration in Srinagar: As per Rule 6 of the POPOS Rules, 2012, in case of
services provided in relation to organization of events, the services shall be
taxable at the place of location of event. Since event is held in non-taxable
territory, it is not liable to service tax.
(3) Services provided to a company located in Goa in relation to fashion 12,00,000
show in Dubai: Since services are in relation to event held in Dubai, hence, as
per Rule 6, they are not taxable. But, since the services are provided to a
recipient located in taxable territory (Jaipur) and both service provider and
recipient are located in taxable territory, hence, as per Rule 8, these services
are liable to service tax.
(4) Services of online database access and retrieval services provided from 5,00,000
its website: As per Rule 3, the place of provision is the place of location of
service receiver. Thus, services provided to recipient of service located
outside India is not taxable.
Total Taxable Value 17,00,000
Service tax @ 14% 2,38,000
Add: SBC @ 0.5% 8,500
Add: KKC @ 0.5% 8,500
Total Service Tax (including SBC & KKC) 2,55,000

Question 12
Mr. Karan has provided the following services during the year 2015-16. Determine whether he is
eligible for small service provider exemption during the year 2016-17: ₹
(a) Service exported outside India 5,00,000
(b) Renting of residential dwelling for residence 5,00,000
(c) Service fully exempt under mega exemption notification 8,00,000
(d) Declared services (Value as per Section 67 read with the valuation rules is
60% of the total amount charged) 4,00,000
(e) Total amount of services in which 50% abatement has been provided; and 4,00,000
(f) Other services provided (including ₹ 50,000 towards services where whole
of the service tax was payable by the service recipient) 5,60,000

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Solution:
Mr. Karan would be eligible for small service providers exemption under Notification No. 33/2012-ST,
if the “aggregate value” of taxable service provided during the year 2015-16 is upto ₹ 10,00,000. The
relevant computations are shown below (amount in ₹) –
(a) Service exported outside India – Not taxable service, as not liable to service Nil
tax u/s 66B – Not includible
(b) Renting of residential dwelling for residence is falling under negative list – Not Nil
taxable services – Not includible
(c) Services fully exempt under other mega exemption notifications - Specifically Nil
excluded in determination of aggregate value of taxable services
(d) Declared services - Value as determined as per section 67 read with Valuation 2,40,000
Rules is to be taken.
(e) Services eligible for abatement - Abatement is a form of partial exemption. 2,00,000
Value after exemption viz. ₹ 2,00,000 shall be taken.
(f) Other services - Includible (Even services covered under reverse charge are 5,60,000
includible) (It is assumed that Mr. Karan is not a GTA service provider)
Aggregate Value under Notification No. 33/2012-ST for F.Y. 2015-16 10,00,000
Since the aggregate value is ₹ 10,00,000 (i.e., not exceeding ₹ 10,00,000) during F.Y. Eligible for
2015-16, Mr. Karan is eligible for small service provider exemption during the exemption
financial year 2016-17.
Question 13
M/s. ABC Ltd. owns hotel, immovable properties and is managed in letting of the same.
(1) Hotel rooms are let out at declared tariff of ₹ 1,000 per room day but actual room rent charged
₹ 900 per room day. Number of days for which it is let out = 50 days;
(2) Guest house is let out at declared tariff of ₹ 900 per room day and actual room rent charged is ₹
700 per room day. Number of days which it is let out = 60 days;
(3) A building located at Canada was let out for office purpose to M₹ Mahima having fixed
establishment at Canada. Rent charged is ₹ 30 lakhs;
(4) A vacant land was let out for animal husbandry at ₹ 2 lakhs;
(5) A building let out for commerce purpose : ₹ 5 lakhs;
(6) A dharmashala (non-commercial) is given on rent. Declared tariff of ₹ 1,200 per room day but
actual room rent charged 600 per room day. Number of days for which it is let out = 60 days;
(7) A Building was let out to PQR Ltd for official use for ₹ 1 lakh p.m. from July 2016 to September,
2016. Municipal tax was paid for ₹ 24,000 from April, 2016 to March, 2017.
Compute the amount of service tax, SBC & KKC payable if all charges are exclusive of service tax, SBC &
KKC. Ignore Small Service Providers’ exemption. The information pertains to quarter ending 30-09-2016.
Solution: Computation of the value of taxable services & service tax (amounts in ₹)
(1) Hotel rooms let out (Taxable since declared tariff is ₹ 1,000] 27,000
[Gross amount charged (₹ 900 × 50) = ₹ 45,000 - Abatement @ 40%] i.e. ₹
45,000 – ₹ 18,000.
(2) Guest house let out 1No,xable since declared tariff is less than ₹ 1,000] Not taxable
(3) Building located at Canada (Taxablility arises only when services are provided Not taxable
in taxable territory. As per Rule 5 of POPS Rules, 2012, here the place of
provision will be non taxable territory as the building is located in non taxable
territory and service recipient is also located in non taxable territory.]

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 PRIME VISION / C.A. FINAL / INDIRECT TAXATION

(4) A vacant land let out for animal husbandry (Not taxable since the same is Not taxable
covered under negative Not taxable list]
(5) Building let out for commerce purpose. 5,00,000
(6) A dharmashala is given on rent. (Taxable even if it is non commercial since 21,600
declared tariff is not less than ₹ 1,000]
[Gross amount charged (₹ 600 × 60) = ₹ 36,000 - Abatement @ 40%] i.e. ₹
36,000 – ₹ 14,400.
(7) Building let out to PQR Ltd. 2,94,000
[Gross amount charged ₹ 3,00,000 - Municipal tax from July, 2016 to
September, 2016 – ₹ 6,000. From the gross amount charged for renting, only
the municipal tax proportionate to the period for which service tax is paid is to
be deducted.]
Total taxable value 8,42,600
Service tax @ 14% 1,17,964
Add: SBC @ 0.5% 4,213
Add: KKC @ 0.5% 4,213
Total service tax (including SBC & KKC) 1,26,390
Question 14
NCJ Production limited is engaged in production of Hindi films. It r6yies you with the following
information for the quarter ended 30-09-2016. You are required to compute the service tax liability if
all the receipts are exclusive of service tax, SBC and KKC. The company has provided services of ₹ 25
lakhs in the preceding financial year.
(1) Receipts for permanent transfer of rights of film “TAMASHA” to Sony Music Limited:
₹ 1,45,00,000.
(2) Receipts from temporary transfer of rights of film “MATR bhakti” to distributors for exhibition
of film in cinema hall: ₹ 20,00.000.
(3) Receipts from temporary transfer of rights of film “MATR bhakti” to Sachi distributors for
exhibiting film in television channels: ₹ 35,00,000.
(4) Receipts from permanent transfer of rights of film “OK JANU” to Star Entertainment Limited for
exhibition in television channels: ₹ 22,00,000.
(5) NCJ Limited has purchased rights of Rajasthani song from Ms. Rangili. Royalty received by the
company from various persons from use of the song: ₹ 25,50,000.
Solution: Computation of taxable service and service tax leviable thereon (amount in ₹)
(1) Receipts for permanent transfer of rights of film “TAMASHA” to Sony Music Not liable to
Limited. Since it amounts to sale of goods, the same will not be liable for service tax
service tax.
(2) Receipts from temporary transfer of rights of film “MATR bhakti” to Not liable to
distributors for exhibition of film in cinema hall. The same is exempt from service tax
service tax as per mega exemption Notification No. 25/2012-ST.
(3) Receipts from temporary transfer of rights of film “MATR bhakti”to Sachi 35,0,000
distributors for exhibiting film in television channels.

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 PRIME VISION / C.A. FINAL / INDIRECT TAXATION

(4) Receipts from permanent transfer of rights of film “OK JANU” to Star Not liable to
Entertainment Limited for exhibition in television channels, since it amounts service tax
to sale of goods and the same will not be liable for service ta
(5) Royalty received by the company from various persons from use of the song 25,50,000
will be liable for service tax.
Value of taxable service 60,50,000
Service tax u/s 66B @ 14% of taxable value 8,47,000
Add: SBC @ 0.5% 30,250
Add: KKC @ 0.5% 30,250
Total service tax (including SBC & KKC) 9,07,500
Question 15
ABC Limited is engaged in execution of works contract which are liable to VAT as transfer of property
in goods involved in execution of works contract. You are required to compute taxable value of service
and service tax, SBC & KKC leviable thereon under rule 2A(ii) of Service Tax (Determination of Value)
Rules, 2006 for month ended 30.6.2016, if the company has not availed small service provider
exemption. The amount charged are exclusive of all taxes.
(1) Services provided to Government by way of construction of a civil structure for official use. The
contract has been entered prior to the March, 2015 and on which appropriate stamp duty had
been paid prior to such date: ₹ 75,000.
(2) Services provided to Government by way of construction of a civil structure for official use. The
contract has been entered on 01-04-2016: ₹ 75,000.
(3) Services provided to Government by way of repair & maintenance school owned by it. The
contract has been entered on 01-04-2016: ₹ 50,000.
(4) Services provided to Governmental authority by way of construction of dam: ₹ 30,000.
(5) Services provided to the Government by way of construction of a residential complex
predominantly meant for use of their employees. The contract has been entered on 01-04-2016:
₹ 80,000.
(6) Services by way of construction of original works pertaining to an airport. The contract has
been entered prior to 01-03-2015: ₹ 80,000.
(7) Services by way of construction of original works pertaining to Jaipur Metro. The contract has
been entered on 01-04-2016: ₹ 80,000.
(8) Services by way of construction of original works pertaining to low cost houses up to a carpet
area of 60 square metres per house in a housing project approved by the competent authority
under housing scheme of a State Government: ₹ 90,000.
Solution: Computation of value of taxable service and service tax thereon - under Rule 2A(ii) of
Service tax (Determination of Value) Rules, 2006 (amount in ₹):
Particulars Total % of total Taxable
amount amount value
charged charged
(1) Services provided to Government by way of construction 75,000 - -
of a civil structure for official use. (It is exempt from tax
vide Entry No. 12A of notification no. 25/2012)
(2) Services provided to Government by way of construction 75,000 40% 30,000
of a civil structure for official use. (It amounts to original
works. The same shall not be exempt since contract has
been entered on 01-04-2016.)
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 PRIME VISION / C.A. FINAL / INDIRECT TAXATION

(3) Services provided to Government by way of repair & 50,000 70% 35,000
maintenance school owned by it.
(4) Services provided to Governmental authority by way of 30,000 - -
construction of dam. (The same is exempt from tax.)
(5) Services provided to the Government by way of 80,000 40% 32,000
construction of a residential complex predominantly
meant for use of their employees. (It amounts to
original works.)
(6) Services by way of construction of original works 80,000 - -
pertaining to an airport.(It is exempt from tax vide
Entry No. 14 of notification no. 25/2012)
(7) Services by way of construction of original works 80,000 40% 32,000
pertaining to Jaipur Metro. Since the contract has
been entered on 01-04-2016, it will be liable to
service tax.
(8) Services by way of construction of original works 90,000 - -
pertaining to low cost houses up to a carpet area of
60 square metres per house in a housing project
approved by the competent authority under housing
scheme of a State Government is exempt from tax.
Total value of taxable services 1,29,000
Service tax payable @ 14% 18,060
Add: KKC @ 0.5% 645
Add: SBC @ 0.5% 645
Total service tax (including SBC & KKC) 19,350

Question 16
PQR Limited is engaged in execution of works contract which are liable to VAT as transfer of property
in goods involved in execution of works contract. You are required to compute taxable value of service
and service tax leviable thereon under rule 2A(ii) of Service Tax (Determination of Value) Rules, 2006
for quarter ended 30-09-2016, if the company has not availed small service provider exemption. The
amount charged are exclusive of all taxes.
(1) New construction of commercial building: ₹ 75,00,000
(2) Erection of Textile Plant: ₹ 1,25,00,000
(3) Additions made to abandoned structures on land to make them workable: ₹ 18,00,000
(4) Repairs and maintenance of air conditioners: ₹ 25,00,000
(5) Completion and finishing services of residential project: ₹ 12,00,000
(6) Plastering services of commercial building: ₹ 12,80,000

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 PRIME VISION / C.A. FINAL / INDIRECT TAXATION
Solution: Computation of value of taxable service and service tax thereon - under Rule 2A(ii) of
Service tax (Determination of Value) Rules, 2006 (amount in ₹):
Particulars Total % of total Taxable
amount amount value
charged charged
(1) New construction of commercial building (It is 75,00,000 40% 30,00,000
original works)
(2) Erection of Textile Plant (It is original works) 1,25,00,000 40% 50,00,000
(3) Additions made to abandoned structures on land to 18,00,000 40% 7,20,000
make them workable (It is original works)
(4) Repairs and maintenance of air conditioners 25,00,000 70% 17,50,000
(5) Completion & finishing services of residential project 12,00,000 70% 8,40,000
(6) Plastering services of commercial building 12,80,000 70% 8,96,000
Total value of taxable services 1,22,06,000
Service tax payable @ 14% 17,08,840
Add: SBC @ 0.5% 61,030
Add: KKC @ 0.5% 61,030
Total service tax (including SBC & KKC) 18,30,900
Question 17
SDMA Ltd. provides works contract service and furnishes you with the following information for the
quarter ended 30-09-2016. It opted for Rule 2A(ii) of Service tax (Determination of Value) Rules, 2006.
Compute the value of taxable service and service tax payable thereon.
(1) Glazing, plastering the floor and wall tiling: ₹ 20 lakhs;
(2) Annual maintenance contract of cars: ₹ 10 lakhs;
(3) Installation of AC, lifts and escalators: ₹ 40 lakhs;
(4) Erection of fire proofing system in airport (The contract is entered on 1-1-2016): ₹ 70 lakhs;
(5) Repair and maintenance of building: ₹ 25 lakhs;
(6) Installation of mechanised food grain handling system: ₹ 7 lakhs;
(7) Construction of offices for Sales Tax Department (The contract is entered on 1-1-2016):
₹ 35 lakhs;
(8) Construction of road on sub-contract basis for L & T (main contractor) who is engaged in
construction of road for use by general public: ₹ 15 lakhs;
(9) Construction of commercial building (FMV of goods supplied by recipient of 5 laths and no
amount was charged for it): ₹ 30 lakhs;
(10) Repair and Maintenance of Airport (The contract is entered on 1-1-2016): ₹ 20 laths.
Other Details:
(a) Excise Duty paid on Capital goods used for providing all these services: ₹ 2 lakhs;
(b) Excise Duty paid on inputs used for providing these services: ₹ 11 lakhs;
(c) Received architect services in relation to construction of offices for Sales Tax Department:
₹ 2 lakhs;
(d) Received services of subcontractor for construction of offices for Sales Tax Department:
₹ 10 lakhs;
(e) Received services of subcontractor for construction of Commercial Building: ₹ 3 lakhs.
Compute the value of taxable service and service tax thereon if all charges are exclusive of service tax.
Ignore Small Service Providers exemption.
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 PRIME VISION / C.A. FINAL / INDIRECT TAXATION
Solution: Computation of value of taxable service and service tax thereon - under Rule 2A(ii) of
Service tax (Determination of Value) Rules, 2006. (amount in ₹):
(1) Glazing, plastering the floor and wall tiling (Taxable value of service – ₹ 20 14,00,000
lakhs × 70%)
(2) Annual maintenance contract of cars (Taxable value of service – ₹ 10 lakh × 7,00,000
70%)
(3) Installation of AC, lifts and escalators (Taxable value of service – ₹ 40 lakhs × 16,00,000
40%)
(4) Erection of fire proofing system in airport (Taxable value of service – ₹ 70 28,00,000
lakhs × 40%)
(5) Repair and maintenance of building (Taxable value of service – ₹ 25 lakhs x 17,50,000
70%)
(6) Installation of Mechanised food grain handling system Exempt
(7) Construction of offices for Sales Tax Department (Taxable value of service – ₹ 14,00,000
35 lakhs × 40%)
(8) Construction of road on subcontract basis Exempt
(9) Construction of commercial building (Gross amount charged ₹ 30 lakhs + Fair 14,00,000
Market Value of goods supplied ₹ 5 lakhs = ₹ 35 lakhs) (Taxable value ₹ 35
lakhs × 40%)
(10) Repair and Maintenance of airport (Taxable value of service – ₹ 20 lakhs × 70%) 14,00,000
Value of taxable services 1,24,50,000
Service Tax (including KKC) @ 14.5% 18,05,250
Less: CENVAT Credit:
(a) Duty paid on capital goods (50% of duty is allowed in year of acquisition and 1,00,000
balance in subsequent years)
(b) Duty paid on inputs Not allowed
(c) Service tax paid on architect service - CENVAT credit is allowed (Since input 29,000
service is used for providing taxable service) (₹ 2,00,000 × 14.5%) (No
CENVAT Credit is allowed of SBC)
(d) Input service of subcontractor - CENVAT credit is allowed (₹ 10,00,000 × 1,45,000
14.5%) (No CENVAT Credit is allowed of SBC)
(e) Service tax paid on services of subcontractor (₹ 3 lakhs × 14.5%) (No CENVAT 43,500
Credit is allowed of SBC)
Net service tax (including KKC) 14,87,750
Add: SBC @ 0.5% of ₹ 1,24,50,000 62,250
Service tax payable (including SBC & KKC) 15,50,000

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 PRIME VISION / C.A. FINAL / INDIRECT TAXATION
Question 18
A builder has entered into agreement to sale a flat (carpet area 1800 sq ft) out of 50 flats to customer.
The breakup of his charges are as follows:
(1) Price of flat (including apportioned value of cost of land): ₹ 4,00,00,000
(2) Prime Location Charges (PLC) (extra charges for getting sea view): ₹ 2,00,00,000
(3) Charges for providing space for covered parking: ₹ 12,50,000
(4) Club membership fee (for club to be formed after construction is complete): ₹ 20,00,000
(5) Charges for carrying out modifications as required by customer: ₹ 20,00,000
(6) Stamp duty for executing sale deed on actual basis: ₹ 40,00,000
(7) Documentation Charges: ₹ 7,50,000
(8) Maintenance charges to maintain building till the residential complex is handed over to
Housing Society members: ₹ 40,00,000
The builder received payment of ₹ 1,50,00,000 before construction was complete and balance amount
was received after obtaining completion certificate from the Corporation. The builder has availed
services for construction of flat on which service tax (including SBC & KKC) of ₹ 60,000 had been paid.
He had used cement, steel and building material during construction, on which excise duty paid was
60,000. Compute the service tax, SBC & KKC payable.
Solution: Computation of value of taxable service and service tax liability (amt. in ₹):
(1) Price of flat (including apportioned value of cost of land) 4,00,00,000
(2) Prime Location Charges (PLC) (extra charges for getting sea view) (These 2,00,00,000
charges are part of construction service of flat. These are part of ‘naturally
bundled services’.)
(3) Charges for providing space for covered parking (These charges are part of 12,50,000
construction service of fiat.)
(4) Club membership fee (for club to be formed after construction is complete). Nil
These are not part of construction service of flat. These are not part of
‘naturally bundled services’.
(5) Charges for carrying out modifications as required by customer (These 20,00,000
charges are part of construction service of flat)
(6) Stamp duty for executing sale deed on actual basis (Stamp duty shall not form Nil
part of value of service)
(7) Documentation Charges (These charges are part of construction service 7,50,000
of flat)
(8) Maintenance charges to maintain building till the residential complex is Nil
handed over to Housing Society of membe₹ (These are not part of
construction service of flat. These are not part of naturally bundled services)
Total Amount 6,40,00,000
Less: Abatement (70%) 4,48,00,000
Taxable Value 1,92,00,000
Service tax payable @ 14% 26,88,000
Add: KKC @ 0.5% (₹ 13,80,000 × 0.5%) 96,000
Less: CENVAT credit of input services (including KKC but excluding SBC) [₹ 60,000 ×
14.5%/15%]
(CENVAT credit of excise duty paid on building material cannot be availed) - 58,000
Net service tax payable 27,26,000
Add: SBC @ 0.5% [₹ 13,80,000 × 0.5%] 96,000
Service tax liability 28,22,000
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 PRIME VISION / C.A. FINAL / INDIRECT TAXATION
Question 19
KC Pvt. Ltd. has provided following outdoor catering services in the month of June, 2016. Compute the
value of taxable service and service tax, SBC & KKC payable thereon if all larges are exclusive of service
tax, SBC & KKC. Ignore Small Service Providers exemption:
(1) Outdoor Catering Service to Higher Secondary School within the premises of school: ₹ 5 lakhs
(2) Providing food to the students under mid-day meals scheme sponsored by Government:
₹ 10 lakhs
(3) Provides catering services along with supply of food and drinks in marriage functions:
₹ 50 lakhs
Fair market value of goods supplied by receiver: ₹ 20 lakhs
No amount was charged for the goods supplied
(4) Provides catering service to SDMA Ltd. where food & drinks are not supplied: ₹ 25 lakhs
Solution: The relevant computation are as follows: (amt. in ₹):
Outdoor catering service to Higher Secondary School within the premises of school Exempt
Provision of food under mid Day mean Scheme sponsored by Government Exempt
Provision of catering service along with supply of food & drinks -
Gross amount charged : ₹ 50 lakhs
Add: FMV of goods supplied : ₹ 20 lakhs
₹ 70 lakhs
Less: Amt. charged for goods supplied : Nil
Total amount charged : ₹ 70 lakhs
Value of service (₹ 70 lakhs × 60%) 42,00,000
Provision of catering services to SDMA Pvt. Ltd. where foods and drinks are not supplied 25,00,000
Value of taxable service 67,00,000
Service tax payable @ 14% 9,38,000
Add: SBC @ 0.5% 33,500
Add: KKC @ 0.5% 33,500
Total service tax (including SBC & KKC) 10,05,000
Question 20
Jaju Hotel provides the following information for services rendered in the month of June, 2016:
(1) Renting of hotel rooms along with supply of food: ₹ 2 lakhs
(2) Serving of food in air conditioned restaurant: ₹ 1.5 lakhs
(3) Serving of food in air conditioned restaurant with bar licence: ₹ 2.5 lakhs
(4) Renting of Hotel rooms: ₹ 1 lakh
(5) Serving of food in a restaurant without air condition facility: ₹ 50,000
(6) A convention room in a hotel was rented to ABC Ltd. for conducting meeting together with
serving of food during lunch to the members of meeting: ₹ 70,000
(7) Services in relation to serving of food or beverages by a canteen maintained in a factory
covered under the Factories Act, 1948, having air-conditioning facility: ₹ 50,000
(8) Total receipts of a hotel having air conditioned facility: ₹ 5.5 lakhs (It includes ₹ 1.5 lakhs on
account of goods sold on MRP basis across the counter for which separate bill is issued.)
Compute value of taxable service and service tax, SBC & KKC thereon if all charges are exclusive of
service tax, SBC & KKC. Ignore Small Service Providers’ exemption.

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 PRIME VISION / C.A. FINAL / INDIRECT TAXATION
Solution: The relevant computations are as follows (amount in ₹):
Renting of hotel rooms along with supply of food: ₹ 2,00,000
Less: Abatement @ 30% (20 × 30%) 1,40,000
Serving of food in air conditioned restaurant
Value of service: ₹ 1.5 lakhs × 40% (being the service portion as per Rule 2C of the 60,000
Service Tax Rules)
Serving of food in air-conditioned restaurant with bar licence
Value of service: ₹ 2.5 lakhs × 40% (being the service portion as per Rule 2C of the 1,00,000
Service Tax Rules)
Renting of Hotel room: ₹ 1,00,000
Less: Abatement @ 40% (refer renting of immovable property) 60,000
Serving of food in a restaurant without air condition facility Exempt
Renting of convention room along with service of food: ₹ 70,000
Less: Abatement @ 30% 49,000
Services in relation to serving of food or beverages by a canteen maintained in a Exempt
factory covered under the Factories Act, 1948, having air-conditioning facility.
(Exempt under Notification No. 25/2012-ST)
Total receipts of a hotel having air conditioned facility: ₹ 5.5 lakhs (₹ 1.5 lakhs which
is on account of goods sold on MRP basis across the counter for which separate bill is
issued will not be liable for service tax)
Therefore, remaining value of service: ₹ 4 lakhs × 40% (being the service portion as
per Rule 2C of the Service Tax Rules) 1,60,000
Value of taxable service 5,69,000
Service tax @ 14% 79,660
Add: SBC @ 0.5% 2,845
Add: KKC @ 0.5% 2,845
Total service tax (including SBC & KKC) 85,350
Question 21
M/s Parag Pvt. Ltd. provides the following services relating to information technology software for the
month of June, 2016. Compute the value of taxable service and service tax payable thereon if all
charges are exclusive of service tax. Ignore Small Service Providers exemption:
(1) Development and Design of information technology software: ₹ 18 lakhs
(2) On-site development of software: ₹ 5 lakhs
(3) Sale of pre-packaged software which is put on media: ₹ 102 lakhs
(4) Information Technology Software recorded on a media on which excise duty is paid as per
provisions of Section 4A of Central Excise Act, 1944 on RSP declared on the package: ₹ 125 lakhs
(5) Advice and consultancy on matters relating to information technology software: ₹ 8 lakhs
(6) License to use software was given to different clients: ₹ 28 lakhs
(7) On the basis of specification of P Ltd., a software was developed and delivered to it on media i.e.
CD: ₹ 7 lakhs
(8) Up-gradation of information technology software: ₹ 9 lakhs
(9) Programming of software: ₹ 1 lakh
(10) Enhancement and implementation of information technology software: ₹ 5 lakhs.
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 PRIME VISION / C.A. FINAL / INDIRECT TAXATION
Solution: The relevant computations are as follows (amount in ₹):
(1) Development and Design of information technology software (Taxable since it 18,00,000
is under the ambit declared service)
(2) On site development of software (Taxable, since it is under the ambit of 5,00,000
declared service)
(3) Sale of pre-packaged software which is put on media - Not taxable (as it is in -
the nature of sale of goods, hence outside the ambit of service)
(4) Information Technology Software recorded on a media on which excise duty is -
paid as per provisions of Section 4A of Central Excise Act, 1944 on RSP
declared on the package [Exemption from service tax vide Notification No.
11)2016-ST w.e.f. 1-3-2016]
(5) Advice and consultancy on matters relating to information technology software 8,00,000
(6) License to use software was given to different clients (Taxable, it is under the ambit 28,00,000
of declared service as it does not involve transfer of right to use of goods)
(7) A customized software was developed and delivered to it on media i.e. CD 7,00,000
(Taxable as this transaction involves both contract of provision of service and
transfer of title in goods. But the essential part of contract is development of
software and it is put on media only to deliver it to client)
(8) Upgradation of information technology software 9,00,000
(9) Programming of software 1,00,000
(10) Enhancement and implementation of information technology software 5,00,000
Value of taxable service 81,00,000
Service tax @ 14% 11,34,000
Add: SBC @ 0.5% 40,500
Add: KKC @ 0.5% 40,500
Total service tax (including SBC & KKC) 12,15,000
Question 22
From the following information pertaining to quarter ending 31-03-2017, compute the value of taxable
service and service tax payable thereon if all charges are exclusive of service tax. Ignore Small Service
Providers exemption. Assume that assessee wants to pay service tax on abated value, wherever such
benefit is available, -
(1) Renting of bus to state transport undertaking: ₹ 25 lakh
(2) Renting of goods vehicle to a goods transport agency: ₹ 75 lakh
(3) Renting of cars designed to carry passengers to a goods transport agency: ₹ 80 lakh
(4) Renting of dumpers: ₹ 65 lakh
(5) Hiring of audio visual equipments for an event: ₹ 35 lakhs
(6) Hiring of pandal or shamiana for organizing functions/events: ₹ 70 lakh
(7) Hiring of a cranes with transfer of right to use: ₹ 20 lakh
(8) Hiring of agro machinery for use in agriculture: ₹ 95 lakh

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 PRIME VISION / C.A. FINAL / INDIRECT TAXATION
Solution: Computation of taxable value and tax thereon amount in ₹)
(1) Renting of bus to state transport undertaking — Exempt (Since the bus Exempt
carries more than 12 passengers, hence, eligible for exemption)
(2) Renting of goods vehicle to a goods transport agency - Exempt (Hiring of Exempt
means of transport of goods to a goods transport agency is exempt)
(3) Renting of cars designed to carry passengers to a goods transport agency - 32,00,000
Not exempt (Hiring of car, which is not a means of transport of goods to GTA
is not exempt) — However, it is eligible for abatement of 60% and taxable
value = ₹ 80 lakhs - 60% of ₹ 80 lakhs).
(4) Renting of dumpers – Taxable 65,00,000
(5) Hiring of audio visual equipments for an event — Taxable 35,00,000
(6) Hiring of pandal or shamiana for organizing functions/events — Taxable 70,00,000
(7) Hiring of a cranes with transfer of right to use - Not taxable (As declared Not taxable
service u/s 66D(f) excludes cases of transfer of right use goods, which is
deemed sale) taxable
(8) Hiring of agro machinery for use in agriculture — Covered under negative Not taxable
list of agriculture related service, hence not taxable.
Value of taxable service 2,02,00,000
Service tax @ 14% 28,28,000
Add: SBC @ 0.5% 1,01,000
Add: KKC @ 0.5% 1,01,000
Total service tax (including SBC & KKC) 30,30,000
Question 23
M/s MBT & Co. (a partnership firm having office at Mumbai) is engaged in leasing or hiring of vehicles.
From the following information, compute the value of taxable service by M/s MBT Co.:
(1) A motor vehicle was given under an agreement pf finance lease for ₹ 2 lakhs p.a.;
(2) A lorry was given on hire to a Goods transport agency for ₹ 2 lakhs p.a.;
(3) A motor cab having seating capacity of 6 persons was given on hire to a State Transport
undertaking for ₹ 10 lakhs p.a.;
(4) A 15 seater motor vehicle was given hire to a State Transport undertaking for ₹ 12 lakhs p.a.;
(5) A motor cab was given on hire to ZC Pvt. Ltd. (manufacturing company) to carry passengers for
₹ 3 lakhs;
(6) A motor cab was given on rent to LT & Co. who is engaged in hiring the cabs for ₹ 7 lakhs;
(7) A motor van was given on hire to & Co. (located at Jammu & Kashmir) not engaged in transport
of passengers for a period of one month for ₹ 1,50,000;
(8) A bus was given on hire to ST & Co. (located at Jammu & Kashmir) for a period of one year for
₹ 5 lakhs.
Note: It has been assumed that MBT & Co. has opted for abatement unless stated otherwise and has
not taken CENVAT credit on inputs and capital goods and input services.

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 PRIME VISION / C.A. FINAL / INDIRECT TAXATION
Solution: The relevant computations are as follows (amount in ₹):
(1) Motor vehicle given on finance lease (Not covered under definition of Not Taxable
declared service)
(2) Lorry given on hire to Goods Transport Agency (The same is exempt under Exempt
Mega Exemption Exempt Notification No. 25/2012)
(3) Motor cab given on hire to State transport undertaking [Taxable as seating 4,00,000
capacity does not exceed 12 persons, the service is provided to a person
engaged in similar business, and RST & Co. opted for abatement, service tax
is payable by MBT & Co.) (₹ 10 lakhs - 60% of ₹ 10 lakhs)]
(4) Motor vehicle having 15 seating capacity to State transport undertaking (Not Exempt
taxable as Exempt seating capacity exceeds 12 passengers)
(5) Motor cab given on hire to ZC Pvt. Ltd. (Taxable but service provider has -
opted for abatement, hence, the entire service tax is payable by service
receiver, as ZC Pvt. Ltd. not engaged in similar business]
(6) Motor cab given on hire to MN & Co. [As MN & co. is engaged in the similar 2,80,000
business and RST & Co. opted for abatement, service tax payable by MBT &
Co. (₹ 7 lakhs – 60% of ₹ 7 lakhs)]
(7) Motor van given on hire to LT & Co. (As per Rule 9 of POP Rules, the place of 1,50,000
provision is location of service provider i.e. taxable territory, hence liable for
service tax. Besides this the service receiver is located in non taxable territory,
hence the entire service tax is payable by service provider and since it is not a
motor cab, hence no abatement will be admissible to MBT & Co.
(8) Bus given on hire to ST & Co. (As per rule 3 of POP Rules, the place of -
provision is location of service receiver i.e. non taxable territory, hence not
liable for service tax)
Value of taxable service 8,30,000
Question 24
M/s ITC, a company engaged in job work relating to various goods or on behalf of other companies,
presents the following information of its receipts for the month of July, 2016 (assume that unless
otherwise stated, the activity doesn’t amount to manufacture in the hands of M/ s. ITC):
(1) Charges for manufacture of medicines liable to excise duty under Medicinal and Toilet
Preparations (Excise Duties) Act, 1955: ₹ 25 lakhs;
(2) Charges for manufacture of alcoholic drinks liable to excise duty under the Rajasthan State
Excise Act, 1950: ₹ 15 lakhs;
(3) Charges for printing work undertaken for the client: ₹ 10 lakhs;
(4) Charges for textile processing work for the client: ₹ 15 lakhs;
(5) Charges for cutting and polishing work of diamond and gemstones for the client: ₹ 12 lakhs;
(6) Charges for processing of product C (the client manufactures the final product out of product C
processed by M/s. ITC; the final product is liable to nil rate of duty): ₹ 16 lakhs;
(7) Charges for processing of product D (the client manufactures the final product out of product
processed by M/s. ITC; the final product is liable to excise duty @ 10%): ₹ 20 lakhs;
(8) Charges for process of electroplating of parts of cycle for 50 lakhs. (In previous financial year,
the total value of service in relation to specified process is ₹ 250 lakhs);
(9) Charges for certain process which amounts to manufacture of goods which is liable to nil rate
of duty: ₹ 30 lakhs;
(10) Charges for certain process which amounts to manufacture of goods which is liable to excise
duty @12.5%: ₹ 22 lakhs;
(11) During the year, it carried out certain process as job work which did not amount to
manufacture and paid central excise @ 12.5% on the same: ₹ 13 lakhs.
Compute the value of taxable service and service tax if any payable thereon if all charges are exclusive
of service tax, SBC & KKC. Ignore Small Service Providers exemption.

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 PRIME VISION / C.A. FINAL / INDIRECT TAXATION
Solution: Computation of taxable service and service tax liability (amount in ₹):
(1) Charges for manufacture of medicines liable to excise duty under Medicinal Nil
and Toilet Preparations (Excise Duties) Act, 1955 (Covered in the definition
of process amounting to manufacture. Thus, included in the negative list.)
(2) Charges for manufacture of alcoholic drinks liable to excise duty under the 15,00,000
Rajasthan State Excise Act, 1950 (Not Covered in the definition of process
amounting to manufacture. Thus, liable to service tax)
(3) Charges for printing work undertaken for the client (Covered under Exempt
Exemption Notf No. 25/2012)
(4) Charges for textile processing work for the client (Covered under Exemption Exempt
Notf No, 25/2012)
(5) Charges for cutting and polishing work of diamond and gemstones for the Exempt
client (Covered Exempt under Exemption Notification No. 2 5/2012)
(6) Charges for processing of product C (Taxable, as the final product is liable to 16,00,000
nil rate of duty meaning that appropriate duty is not payable by principal
manufacturer and therefore is outside the scope of exemption)
(7) Charges for processing of product D (Not taxable as on the final product, Exempt
appropriate duty is payable by principal manufacturer)
(8) Charges for process of electroplating of parts of cycle (Taxable since in 50,00,000
previous financial year, the total value of service of specified process exceeds
₹ 150 lakhs)
(9) Process which amounts to manufacture of goods and liable for nil rate of Nil
duty (Not taxable as Nil the process amounts to manufacture or production
of goods)
(10) Process which amounts to manufacture of goods and liable to excise duty (Not Nil
taxable as the Nil process amount to manufacture or production of goods)
(11) Process which did not amount to manufacture but on which excise duty has been 13,00,000
wrongly paid. (Taxable as the process does not amount to manufacture)
Value of Taxable service 94,00,000
Service tax @ 14% 13,16,000
Add: SBC @ 0.5% 47,000
Add: KKC @ 0.5% 47,000
Total Service-tax (including SBC & KKC) 14,10,000
Question 25
HSBC Bank, furnishes you the following transaction for the month of July 2016:
(1) Interest earned on reverse repo transaction: ₹ 400 crore;
(2) Commission charged on debt collection service: ₹ 10 crores;
(3) Charges for late payment of dues on Credit card outstanding: ₹ 5 crores;
(4) Provided overdraft & credit card facility of 100 crores, processing & documentation fees @ 2%;
(5) Commission charged of 45 lakhs for preparation of demand draft of ₹ 300 crores;
(6) Margin on sale and purchase of forward contract: ₹ 15 crores;
(7) Trading in commercial paper and certificate of dept.: ₹ 40 crores;

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 PRIME VISION / C.A. FINAL / INDIRECT TAXATION
(8) Bills discounted of 1rores, discount earned ₹ 100 lakhs;
(9) Fees for providing advice in respect of corporate restructuring ₹ 20 lakhs;
(10) Commission from government towards collection of taxes: ₹ 1 crore;
(11) Credit card & Debit card related charges: ₹ 35 lakhs;
(12) Services provided in relation to chit business for ₹ 30 lakhs (No CENVAT credit has been taken);
(13) Purchase & sale of foreign currencies amounting to ₹ 4,000 lakhs (includes 1,00O lakhs
towards transaction with banks and money changers and ₹ 100 lakhs towards transaction with
foreign banks);
Note: It may be noted that all transaction of purchase and sale of foreign currencies were
uniformly for a sum of ₹ 1 lakh per transaction.
(14) Loan extended 200 crores. Loan processing fee charged - 1%;
(15) Interest earned on loan ₹ 2 crore; Penal interest charged for delay in repayment of loans by
customers: ₹ 10 lakhs.
Compute the value of taxable service and service tax payable thereon if all charges are exclusive of service
tax, SBC & KKC. Assume that bank has opted for option under Rule 6(7B) of Service Tax Rules, 1994).
Solution: Computation of the value of taxable services & service tax (₹ in crores):
(1) Interest earned on Reverse repo transaction (Reverse repo transaction are Nil
excluded from the definition of service)
(2) Commission charged on debt collection service 10.00
(3) Charges for late payment of dues on Credit card outstanding - Taxable (as these 5.00
charges are collected for providing service and are not in nature of interest.)
(4) Processing and documentation fees for overdraft and credit facility 2.00
(5) Commission charged for preparation of demand draft 0.45
(6) Margin on sale and purchase of forward contract — Not taxable (since it is Nil
transaction only in money which is specifically excluded from the definition
of service.)
(7) Trading in commercial paper or certificate of deposit - Not taxable (since it Nil
is transaction only in money which is specifically excluded from the
definition of service.)
(8) Discount earned on Bills Discount — Not taxable (since this is specifically Nil
covered under negative list.)
(9) Fees for providing advice in respect of corporate restructuring 0.20
(10) Commission from government towards collection of taxes 1.00
(11) Credit card and debit card related charges 0.35
(12) Services relating to chit business (0.30 - Abatement @ 30% i.e. 0.09) 0.21
(13) Loan processing fees 2.00
(14) Interest earned on loans - Not taxable as covered under negative list (Penal Nil
interest charged for delay in repayment is not a consideration for service
thus not taxable)
Value of taxable service 21.21
Service tax (including SBC & KKC) @ 15% (A) 3.1815
Purchase and sale of foreign currency - Total value of currency bought and sold
₹ 4,000 lakhs (B)
Less: Transaction with other banks and money changers not taxable = ₹ 1,100 lakhs
(since it is covered under negative list). Therefore, taxable transaction = ₹ 2,900
lakhs. Since all the transaction are for a sum of ₹ 1 lakh per transaction, hence, there
are ₹ 2,900 taxable transaction.
The amount of service tax under Rule 6(7B) [(0.14% of ₹ 1 lakh) × 2,900 0.0435
transaction] = ₹ 4,06,000 and SBC @ 0.5% [₹ 4,06,000 × 0.5% ÷ 14%] & KKC @
0.5% [₹ 4,06,000 × 0.5% ÷ 14%] = ₹ 29,000
Total service tax (including SBC & KKC) [A + B] 3.2250

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 PRIME VISION / C.A. FINAL / INDIRECT TAXATION
Question 26
Compute value of taxable services of transport of passengers of air from the following data relating to
sums received exclusive of service tax, SBC & KKC for the month ending 30.9.2016:
(1) Passengers embarking at Arunachal Pradesh: ₹ 105 lakh (out of the said sums ₹ 15 lakhs
relates to other than economy class);
(2) Passengers where journey terminated at Assam: ₹ 85 lakh (out of the said sums ₹ 5 lakhs
relates to other than economy class);
(3) Amount charged from passengers for flights starting from Sydney to Delhi: ₹ 650 lakh (out of
the said sums ₹ 450 lakhs relates to other than economy class);
(4) Amount charged from passengers for flights starting from Delhi to Sydney (economy class): ₹
840 lakh (including passenger taxes levied by government and shown separately on ticket: ₹
500 lakh).
Compute value of taxable services and service tax thereon, assuming that airlines has opted to pay
service tax on abated value.
Solution: Computation of taxable value and gross service tax (₹ in lakh):
(1) Passengers embarking at Arunachal Pradesh. (The same is exempt from Exempt
service tax under Exemption notification 25/2012)
(2) Passengers where journey terminated at Assam. (The same is exempt from Exempt
service tax under Exemption notification 25/2012)
(3) Amount charged from passengers for flights starting from Sydney to Delhi Not taxable
(Place of embarkation is Sydney viz. outside India; hence, place of provision
as per Rule 11 of Place of Provision of Services Rules, 2012, Rules is Sydney
viz, outside India, therefore, it is not chargeable to service tax in India
(4) Amount charged from passengers for flights starting from Delhi to Sydney 340
(Gross amount charged = ₹ 340 lakh - Passenger taxes levied by government
and shown separately on ticket ₹ 100 lakh)
Total 340
Less: Abatement @ 60% 204
Value of taxable service 136
Service tax @ 14% 19.04
Add: SBC @ 0.5% 0.68
Add: KKC @ 0.5% 0.68
Total Service tax (including SBC & KKC) 20.04

Question 27
M/s Jet Airlines furnishes you the following information for computation of its service tax liability (all
amounts exclusive of service tax, SBC & KKC) for the month of October, 2016:
(1) Passengers travelling from Assam to Delhi — 2000 passengers, Gross Value per ticket: ₹ 4,000;
(2) Passengers travelling from Mumbai - London, London - Mumbai with separate ticket – 3,000
passengers, Gross Value per ticket: ₹ 2,000
(3) Passengers travelling from Delhi - London - New York - London - Delhi on a single ticket - 25
passengers, Gross value per ticket ₹ 10,00,000 and separate ticket is issued for New York —
Boston — New York — 200 passengers, Gross value per ticket: ₹ 60,000;
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 PRIME VISION / C.A. FINAL / INDIRECT TAXATION
(4) Passengers travelling from Mumbai - Sikkim — Mumbai with separate ticket for each journey
— 1000 passengers Gross value per ticket: ₹ 5,000;
(5) Passengers travelling from Bagdogra - Kolkata and Kolkata - Delhi with separate tickets,
number of passengers — ₹ 3,500.
Gross value per ticket from Bagdogra — Kolkata — 2,500,
Gross value per ticket from Kolkata - Delhi — 4,000.
(6) Transport of passengers, with accompanied belongings from Jaipur to Jodhpur in Regional
Connectivity Scheme Airport — No of passengers 1000. Gross value per ticket ₹ 1,500.
Every passenger is liable to passenger tax 40% of fare per ticket which is not included in the above
gross value per ticket. The above information relates to passengers travelling by economy class.
Solution: Computation of service tax payable by M/s. ABC Airlines: (amount in ₹)
(1) Passengers travelling from Assam to Delhi (‘Place of provision is Assam but no Exempt
service tax is payable owing to exemption)
(2) Passengers travelling from - (a) Mumbai - London (b) London - Mumbai (For 60,00,000
Journey (a) Mumbai is place of provision of service, hence taxable. For
journey (b) with separate ticket, place of provision of service is London i.e.
in non-taxable territory, hence no service tax liability shall arise.)
(3) Passengers travelling on Delhi - London - New York, London - Delhi with 2,50,00,000
single ticket (The place of provision of service is Delhi, hence journey is
taxable. For journey New York — Boston — New York, place of provision is
New York, hence journey is not taxable, place of provision being in non
taxable territory.)
(4) Passengers travelling from Mumbai — Sikkim - Mumbai (No service tax is Exempt
payable owing to exemption)
(5) Passengers travelling from Bagdogra — Kolkata (Not taxable since the same 1,40,00,000
is exempt. For Journey Kolkata — Delhi, the place of provision is Kolkata,
hence journey is taxable)
Sub Total 4,50,00,000
Less: Abatement @ 60% 2,70,00,000
Value of taxable service [A] 1,80,00,000
(6) Transport of passengers, with accompanied belongings from Jaipur to 15,00,000
Jodhpur in Regional Connectivity Scheme Airport [No of passengers 1000.
Gross value per ticket ₹ 1,500]
Less: Abatement @ 90% 13,50,000
Value of taxable service [B] 1,50,000
Total Value of taxable service [A+B] 1,81,50,000
Service tax @ 14% 25,41,000
Add: SBC © 0.5% 90,750
Add: KKC © 0.5% 90,750
Total Service tax (including SBC & KKC) 27,22,500
Note: The amount of statutory levies is not includible in the value of taxable service as per Rule 6(2)(v)
of Service Tax Valuation Rules, 2006. Since it is not already included, hence, no adjustment is required.

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Question 28
M/s MN Road transports, a GTA, furnishes you the following of services provided by it for the quarter
ended 30-09-2016:
(1) Services provided to unregistered partnership firm: ₹ 7 lakhs;
(2) Freight for transport of wheat for farmers: ₹ 5 lakhs;
(3) Services provided to Mr. L (located in Nepal) for transportation of goods from Uttar Pradesh to
Nepal: ₹ 3 lakhs;
(4) Services provided to Government Companies: ₹ 71 lakhs;
(5) Services provided to Government Departments: ₹ 15 lakhs;
(6) Service provided to R Ltd. located in Jammu & Kashmir for transportation of goods from
Rajasthan to Jammu: ₹ 12 lakh;
(7) Service provided to Mr. C in respect of consignment addressed to M/s C Ltd. (freight paid by
Mr. A): ₹ 25 lakhs;
(8) Service provided to M/s K Ltd, in respect of consignment addressed to Mr. K (freight paid by
M/s. B Ltd.): ₹ 20 lakhs
(9) Services of transportation of used household goods provided to Mr. U $: ₹ 15 lakhs;
(10) Motor vehicle purchased during the year for GTA service – ₹ 18 lakhs (excise duty 12.5%);
(11) Excise duty/Service tax paid on various inputs/Input services used for GTA service: ₹ 40,000
You are require to compute value of taxable service & service tax payable thereon (if all charges are
exclusive of service tax) by M/s. RS road transports (It has opted for abatement).
Solution: Computation of taxable service and service tax thereon (₹ in lakhs):
(1) Services provided to unregistered partnership firm (Since the person liable -
to pay service tax is unregistered partnership firm)
(2) Freight for transport of wat for farmers Exempt
(3) Service provided to Mr. L located in Nepal (As per Place of Provision of Services 3,00,000
Rules, 2012, the place of provision in respect of GTA services shall be the
location of person liable to pay tax. In this case, person liable to pay tax is M/s
MN, who is located in taxable territory. Hence, the same is taxable)
(4) Services provided to Government companies (Since the person liable to pay -
service tax is Government Companies)
(5) Services provided to Government Departments (Taxable, as person liable to 15,00,000
pay tax is M/s MN the Government Department is not a specified person)
(6) Services provided to R Ltd. located in Jammu & Kashmir. (In this case, R Ltd. 12,00,000
is the person liable to pay tax. Since, R Ltd. is located in non taxable territory,
hence the service provider is liable to pay tax)
(7) Services provided to Mr. C (Since the person liable to pay freight is not a 25,00,000
specified person, hence goods transport agency will be liable to pay service tax)
(8) Service provided to M/s. K Ltd. (Since the person liable to pay service tax is -
M/s K Ltd.)
Total Amount 55,00,000
Less: Abatement @ 70% 38,50,000
Value of taxable service (A) 16,50,000
Services of transportation of used household goods provided to Mr. C 15,00,000
Less: Abatement @ 60% 9,00,000
Value of taxable service (B) 6,00,000
Total Value of Taxable service 22,50,000
Service tax @ 14% 3,15,000
Less: CENVAT credit (Not allowed) -
Service tax payable 3,15,000
Add: SBC @ 0.5% 11,250
Add: KKC @ 0.5% 11,250
Total service tax (including SBC & KKC) 3,37,500
Note: In case of services provided by RS Road Transports to specified persons, the liability to pay tax is
on the recipient of service and therefore, it does not form part of taxable service provided by
MN Road Transports.

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