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Service tax

Jitender Kumar Sultania (CA Student) (132 Points)

27 March 2015

I have a query regarding service tax we have raised a invoice in January for professional services and we received payment for the same in the january. we have not deposited service tax on that invoice in the month of febuary. latter on in the month of march we have received a invoice for input service & we paid that in the month of march including service tax.

Now my query is that can we take credit of input tax credit paid of amount paid by us in the month of march against our service tax liability for the january month & we pay net amount to government including interest on gross amount for two month.

Regards,

Jitender Kumar

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14 Replies

Saurabh Maheshwari (B.com,ACA) (5923 Points)
Replied 27 March 2015

I assume that yours is professional partnership firm,As per Sec 68(1) read with Rule 6 of Service Tax Rules,1994 in case of individual,firms and AOP ST to be paid quarterly .

Therefore,ST on service pertaining to the month of Jan will be paybale in April (by 6th of April)...therefore, it is not a case of late payment, so no interest will be chargeabl.... and you can very well claim the cenvat credit of input serv received in Feb.

Jitender Kumar Sultania (CA Student) (132 Points)
Replied 27 March 2015

Ours is Pvt Ltd company. & for the Month/Quarter ending in march service tax is to be paid by 31st march

Saurabh Maheshwari (B.com,ACA) (5923 Points)
Replied 27 March 2015

Ya in that case also you can take credit because credit of input services can be taken on the receipt of invoice and credit once taken can be utilised for immediate month ST liabity payment .

1 Like

Jitender Kumar Sultania (CA Student) (132 Points)
Replied 27 March 2015

But sir our liability is for earlier months can we still utilise it ?

Saurabh Maheshwari (B.com,ACA) (5923 Points)
Replied 27 March 2015

ya you can utilise,As per Rule 3 of Cenvat Credit Rules,2004-Cenvat credit need not to be be matched one to one or month to month.
The only thing to be matched is that credit upto date of ST payment only can be taken....

(Guest)

Mr Saurabh maheshwari, Rule 3 first proviso says that Cenvat available as on the last day of month can be utilised for payment of Service Tax for that month. Mr.Jitender Kumar cannot utilise Cenvat of later date for payment of liability of earlier month

(Guest)

I am talking about first proviso to Rule 3(4)

Sriram (CMA Final) (178 Points)
Replied 28 March 2015

No you cannot utilize march input credit for payment of January Service Tax Liability. you have to remit January ST Liability along with Interest and Interest is to be calculated on no.of.days basis not on Month basis.

Feb 6th is the due date for Jauary. You have to calculate Interest form Feb 06th to till date of payment.

Manjunath (.) (75 Points)
Replied 28 March 2015

Rule says you can utlise cenvat credit which is accounted till last day of the month . against the liability for a particular month . Here you are paying interst for delay of payment so the liabilty is for the month of March only .So u can utlise cenvat credit in the month of March.

Shrikrishna Barure (Student) (22 Points)
Replied 29 March 2015

I am agree with Sriram "You cannot utilize march input credit for payment of January Service Tax Liability. you have to remit January ST Liability along with Interest and Interest is to be calculated on no.of.days basis not on Month basis.

Jitender Kumar Sultania (CA Student) (132 Points)
Replied 30 March 2015

Thanks to all for your valuable reply.

Krushik (Accountant ) (67 Points)
Replied 30 March 2015

I Have quary about New Service Tax rate

Kindly guide me

01) From where it is applicable (14 % )

02) It is 14% or its is 14.42% (Serivce tax + CESS + HCESS)

03 What is swachha bhatat cess ?

Sriram (CMA Final) (178 Points)
Replied 30 March 2015

New ST Rate(14%) is applicable form the date of enactment of bill.
It is 14%. there is no Edu.Cess and SHE Cess for Service Tax.
Swachh Bharat cess is applicable on all or Certain Services. as of now nothing is prescribed.

SRINIVASAN (Business Head) (26 Points)
Replied 10 April 2015

Dear Sir,

We are a new Service firm based at Kolkata. We need to know the following.

(i) Should we charge Service tax from day one of our commencing business activity (invoicing to our customer). We read the rule that says that upto Rs 4 Lac service value per annum, no need to pay Service tax. Once we exceed, we need to pay. Is this correct??

(ii) What is the max limit by which we need to register and Service Tax as per rule??

(iii) How to handle Service+ Material (Some defective parts will be replaced by us). Do we need to prepare one Service invoice + One sale invoice with applicable Sales Tax/VAT??

Please clarify.

Rgds