Service provider liable to pay service tax

SC Vasudeva

My tenant, a Government of India bank, refuses to pay service tax so that I can deposit it in government accounts. On my complaint to the Chandigarh Service Tax department, I am told they are toothless tiger and have no authority to force the bank to pay service tax. For the past more than two years, I am paying service tax on behalf of the bank. If I do not pay the service tax on time then penalty will be imposed on me. There is no agreement between me as a landlord and the tenant (bank) that the service tax has to be paid by the owner of the building. My queries are as under:n What is the law on this issue? n Which authority can decide the matter if I have to file a suit? n Decided case law on the issue.  — Joginder S Bawa

Your queries are replied hereunder:-n Service tax is leviable on the service provider and therefore the liability in respect of service tax is on you.n The law provides that though liability of payment is on the provider, the service provider may recover the same from the person to whom the service is being provided. This will, however, be based on the agreement executed between the parties.n The law on this aspect is very clear and there should not be a need for a decided case on the subject.

I opened a PPF (HUF) account in 1989 and a PPF (individual) account simultaneously in 1990. I have since closed my PPF (HUF) account while my PPF (Individual) account is still continuing with regular subscriptions. I was recently advised that I could not have opened two PPF accounts under my name in 1989 and 1990. My understanding has always been that HUF is a separate entity to an individual and so I was legally allowed to open a PPF (HUF) and PPF (Individual) account. Please clarify. — Pyara Singh

Clause 3(1) of the Public Provident Fund Scheme provides that any individual may, on his behalf or on behalf of a minor of whom he is the guardian subscribe to the Public Provident Fund, any amount not less than Rs 500 and not more than Rs 1,50,000 in a year. Sub-clause (2) of the said clause which was omitted w.e.f. 6.7.1999 provided that notwithstanding anything contained in sub-paragraph one an individual may also subscribe to the Public Provident Fund on behalf of a Hindu Undivided Family. Therefore, I tend to agree with you that the said sub-clause which has now been omitted did provide that a separate account on behalf of Hindu Undivided Family could be opened in addition to the account opened by an individual in his own name.

Deposits in PPF account is one of the valid saving plans for having rebate under Section 80C. Is it mandatory that amount so deposited in your PPF account be out of the savings for that particular FY for which the rebate under this section is claimed or the amount from previous year(s) savings lying in your pension account could also be utilised for such purpose? To make it more clear, I want to know can I deposit the amount lying in my pension account on March 31 in the month of April (next FY) in my PPF account for seeking rebate under Section 80C? — Balbir Singh Batra

Section 80C of the Income-tax Act, 1961, (The Act) does not require that the amount deposited or paid for any of the scheme covered in the said section should be paid out of the income chargeable to tax.

Therefore, there is no prohibition for depositing any amount in the PPF account out of the savings lying in your pension account.