Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ARTICLES ON INPUT TAX CREDIT IN VAT :: due date for vat payment :: ACCOUNTING STANDARDS :: VAT RATES :: cpt :: empanelment :: articles on VAT and GST in India :: form 3cd :: VAT Audit :: TDS :: list of goods taxed at 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARD :: Central Excise rule to resale the machines to a new company :: TAX RATES - GOODS TAXABLE @ 4%
 
 
Direct Tax »
 No change in gold seizure norms in proposed I-T Law amendments
 Direct tax collection will get a long-term boost, Franklin Templeton says
 I-T Act amendments upset calculations of cash hoarders
 Claim tax benefit on costs incurred to evict tenants
 The Integrated Goods And Services Tax Act, 2016
 Here’s what Income Tax Department did leading up to demonetisation
 I-T department asks IDS declarants to pay tax by November 30
 Cash trove tax drive dilemma
  CBDT halves Income Tax refunds issue timeline to 15 days for this fiscal
 CBDT signs four unilateral advance pricing agreements
 Central Board of Direct Taxes allowed Rs 4,500 crore of irregular benefits to infrastructure companies: CAG

Online tax aggregators tweak invoice for service tax hike
March, 26th 2015

The increase in service tax to 14% from 12.36% has prompted start-ups working on an aggregator model to restructure their invoice system to comply with the revision.

"We had to suspend billing for three weeks trying to understand how to pass on the cost and decided that we will collect the service tax on the entire transaction, including our mark-up and pay the tax to the government," said Divakar Vijayasarthy, founder of Chennai based start-up Meeturpro, which works as an online marketplace for lawyers and chartered accountants.

The company incorporated in 2014 records 300 transactions on average per month with ticket-size of Rs 1,300-1,400 per transaction and had to rework the invoicing system to steer clear of any violations. As per the Finance Bill 2015, an aggregator is liable to pay service tax for any service provided under the model wherein the brand name is used.

Directed at the fast-growing segment of taxi services aggregation, the ruling has affected a number of niche startups offering specialised online services ranging from healthcare consultation to architects and lawyers working on the aggregator model where they provide an online presence to professionals to expand their client base. One of the issues faced by the startups is the definition of the term 'aggregator'.

"An aggregator has been defined loosely in the context of the new service tax regime. Any business using a tech platform at any stage can be called an aggregator if he is working with his brand. How many aggregators are transparent enough to call themselves facilitators of a service, which will exempt them from using their brand name?" asked Sagar Shah, international liaison partner and head - indirect tax and regulatory, BDO India LLP.

Matters are further complicated when the aggregators include a payment gateway on their site, he said, adding, "As a recipient of a service, it becomes important to the aggregator if they are making payments to the service provider as a mere facilitator or he assumes responsibility of the service provider. Collection and disbursement of service tax has to be transparent."

Online test-preparation site Superprofs.com, backed by Kalaari Capital and IDG Ventures, had to restructure its fee based on the new regulations. "It took us 10 to 15 days to renegotiate the system as there was some initial confusion and we did not want to pass on the burden to the students. If teachers fall in the income bracket of below Rs 10 lakh, they do not have to pay the service tax. As we sell digital goods, it was easy for us to renegotiate with the vendors.

We collect the tax from the end customer and pass it on to the government," said Piyush Agarwal, CEO and founder of Superprofs, incorporated in 2010.

Multiple players are unable to determine where and how to pass on the cost of a transaction.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Desktop Application Development Outsourcing Desktop Application Development Offshore Desk

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions