Sir, I have a KSFE (Kerala State Financial Enterprises) Chitty (Chit Fund) for 10,00,000. At the begining of the chitty(Chit Fund) all members are paying the whole amount ie 10 lakhs/ 100 members ie. 10,000/- each; and monthly subscription Rs 7500 after deducting the profit share of Rs 2500 (total monthly subscription is 10,000) In every month one chity(Chit Fund) will issue to one member for 10 lakhs; Out of this 1. Chitty(Chit Fund) Subscriber will get 70% ie 7 lakhs Rupees 2. 2.5 lakhs divided to 100 members ie. 2,50,000 Rupees 3. Balance goes to KSFE commission(foreman Commission) ie. 50,000 Rupees The ServiceTax 14% is levied on Sl No.3 (14 % of 50,000- foreman commission) ie. 7000;this amount is liable to pay by the chitty subscriber. The actual benefit receiver is KSFE. The chitty(Chit Fund) subscriber is receiving 30%(ie. 25% +5% foreman commission) less amount while getting the chitty. even the 100th member may get only 95% ie after deducting KSFE foreman Commission. As KSFE is receiving the commission of the chitty who is liable to pay the service tax of the foreman commission? is by customer or by KSFE?