17 August 2011
If a company Dr. say Rs. 220000 (Including service tax) for some exp. on monthly basis and deducting and depositing TDS thereon on monthly basis but dosen't paying service tax element therein of Rs.20000 monthly and just crediting it to party account. Then such service tax element for whole year of Rs.240000 (20000*12) will be allowed or disallowed u/s 43B ???
17 August 2011
Service tax liability is arise on payment basis, if you donot have deposited service tax on payment received from the party then service tax amount shall be disallowed under sec 43B.
in your case if you have received the whole payment from the party during the year then rs. 240000 shall be disallowed
17 August 2011
here we are booking an exp. of rs.220000 inclusive of service tax of rs.20000 and my que. is that we are not paying the amt of exp. nd we are just making a provision of it, then i want to know the exp. amt. to be allowed u/s 43b will be Rs.200000 or Rs.220000 ???
17 August 2011
For Service Provider: There is a fundamental difference between Sales tax and Service tax. In case of Sales tax , the seller is responsible to deposit the sales tax even if he has not collected that from the customer but in case of service tax the liability of service provider arises only when he has received the value of taxable service from the customer. (CIT V Real Image Media Technology P. Ltd)
. For Receiver of the services: On the above logic it can be said that being a receiver of the services and by booking the full amount as expenditure, he becomes liable to pay the service tax also to the creditor. In such a case I would say that the amount of service tax will be disallowed U/s 43B to the extent of Rs 20000 only. . The assesee shall claim expenditure of 200000/-.
11 November 2011
But why Rs.20000 will be disallowed as the same amt is credited to the party account and when the account will settled the amt of service tax will also be paid.???
CAclubindia
