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Urgent

06 July 2011

our company is raising an invoice to another co. in USD currency.total amt is 20000 USD inclusive of service tax. now the payment will be made by the other co.by next month.we will post the entry in our co.'s accounts at todays dollar rate and payment will be in a different dollar rate, so what will be the treatment of difference of dollar rate in our co's books of accounts.and we will be liable to pay service tax according to todays dollar rate and if there is an increase in dollar rate next month so shall we be liable to pay extra service tax recovered. pls help meeeeee

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3 Replies

Swati (Partner at BIDS & Co.) (51 Points)
Replied 06 July 2011

the difference is your gain/loss...and should be routed throuth p&l a/c now question is about the service tax(ST) ST is paid on receipt basis when you receive the the final payment you have to pay the ST i.e in the next month and on the amount actually received...it may be in loss or at profit

1 Like

kaushlesh (NA) (31 Points)
Replied 06 July 2011

Urgent Help

Please somebody tell me " Whether Attendance Allowance received by an employee is tax free or taxable?"

Shubham Singhal (.) (130 Points)
Replied 06 July 2011

Originally posted by : Swati
	the difference is your gain/loss...and should be routed throuth p&l a/c now question is about the service tax(ST) ST is paid on receipt basis when you receive the the final payment you have to pay the ST i.e in the next month and on the amount actually received...it may be in loss or at profit

but according to the ammendment in Finance Act the point of taxation has been ammended and it says that tax us deducted and paid at the time of raising the invoice or the payment is received whichever is earlier. So according to this service tax has to be deposited according to today's dollar rate. pls correct me if I am wrong.