We found that, During the previous period Service Tax element was wrongly debited to Expenditure account. Thus the Expenditure was wronly booked. Now can we rectify the Expenditure by Crediting the amount to Exps account and Debiting to the Service Tax Receivable account? Can we take Input Service Tax Credit for this amount in current year?
Please suggest taking into account all the implecations ie in regards to Income Tax and the Service Tax Angles.
Please let me know the provisions in this regards.
I assume that the case is relating to a corporate company.
Further it is not clear that you paid the tax as service receiver (GTA/Importer of service)or service provider.
I assume that you provide some service and paid excess service tax.
If you had claimed service tax paid wrongly and did not reconsider while preparing Statement of Total Income for the year please ensure that your credit side too follows inclusive method.
You can reverse the aforesaid expenses in the current year as a P & L Appropriation item as per AS 5 (Prior Period Item).
Filing Revised Return may be right choice under Income Tax Act 1961.
But under section 83 read to gether with Section 11 of the Finance Act 1994, within one year from the relevant date refund to be claimed.
In the absence of more details as to nature of service, payment of service tax, date of the same, year under discussion, date of filing returns under income tax and Finance Act, giving opinion is not proper.
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