Hi Experts,
plz explain me what is abatement% in service tax setup.
I know the meaning of abatement but exactly where and why it is used is my problem.
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Normally tax is calculated on the base amount but in certain cases Indian Govt. allows the abatement on the base amount (on which tax need not be calculated and paid).
For Eg. Service Invoice Value 1,00,000
Service Tax % 10
Abatement 25%
The tax calculation will be (1,00,000 -(1,00,000 * 25 /100)) * 10/100 = 7500.
Hope it clears the doubt.