05 September 2013
Our client is dealing in works Contract of Supply & Installation of fire fitting equipment, electrical installation, plumbing and other related civil work. The Agreement with the parties is inclusive of Service Tax and VAT. In the last 5 Years, he has not provided any Service Tax in his books of Accounts and also not paid any Service Tax in the last 5 years and he has also not filed any service tax Return in last five years. Now he has gone to VCES. Ques. 1:- Whether he can provide Service Tax liability in his books of accounts during the current year? Ques. 2:- If Service Tax liability is paid in the current year or subsequent year, will it be allowed under income tax act as Prior Period Government Dues paid during the year? Ques. 3:- What accounting entries will be made during the year to claim Service Tax as an expense. Since In the earlier years the Assessee has paid income tax on all gross receipts. Since he has not provided any liability towards Service Tax.