Liability to pay service tax is on service provider as per Section 68

It is not dependent upon service provider charging Service tax from client or not


In this case, if service provider fails to charge service tax or charges service tax but fails to recover the same,

Then amount received from client will be deemed to be including service tax and service tax will be reverse calculated


Exam Questions

Question 7
A tour operator booked a package tour for a client. He billed the client for his services, but did
not charge any service tax though he is liable to pay service tax under the relevant provisions.
It is the contention of the operator that since he has not collected any service tax from the
client, he will not deposit the same with the Government. On the basis of said information,
answer the following questions:
(i) Do you think the contention of the tour operator is correct in law? Explain.
(ii) In case the tour operator is liable to pay service tax, how will the service tax liability be

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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 13 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.