B2B Service Tax exempt invoices

The following requirements exist for Service Tax invoices:

Service Tax is only chargeable to the end recipient of the service.
Middle parties registered under the same category of services are exempt from paying Service Tax.
Service invoices to middle parties must show the exempted tax amount.

The following steps are required to meet these requirements

Create an exempt service tax code to apply 0% Service Tax to middle party transactions.
- This enables you to have an internal tax report by tax code, listing transactions showing the total taxable amount.
- You can use the total taxable amount to compute and cross-check the 6% exempted Service Tax.
You must compute the 6% Service Tax manually, and enter it into a field in the invoice. This can be the item description, remark, or user-defined field. If necessary, edit the invoice template to create the required field.