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please give me an idea about basic fundamental of ABATEMENT SCHEME & ACTUAL METHOD of service tax.
The scheme of abatement means...If you are not able to find particularly how much is the service portion and how much is the sales portion on total amount which you have received..,then in order to determine how much is the service part you have to apply the prescribed fixed percentage on total amount.
on such service part calculate service tax @12.36%.
EG:Assume that you are engaged in works contract and received the total amount of 1000000.this may include labour charges,technical fees etc..but you are not able to determine exactly how much is the service portion and how much is the sales portion.
a)Then you have to segregate the total amount as 40% for service portion and 60% for sales portion.
b)calculate service [email protected]% on 400000 and sales tax on 600000.
NOTE:The above percentages for all such particular services are defined by act itself.. we can't apply such percentages based on our own assumption.