Bad debts and service tax

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Rahul Gupta (Querist)
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28 April 2016 My client also raised service tax invoice for H2,
His client did not pay him. Just wanted to check, how did we treat this in service tax return. Do we pay service tax in ST return or show credit note?

Amol S Joglekar

Amol S Joglekar (Expert)
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28 April 2016 The debt if partially recovered is to be adjusted in the first place against service tax. If the debt is not received at all (including the amount of service tax), then you can claim the same in LESS payment of service tax

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Rahul Gupta

Rahul Gupta (Querist)
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28 April 2016 Does it impact if service provider is individual or company

Rahul Gupta

Rahul Gupta (Querist)
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28 April 2016 Also please confirm if we have to issue any credit note or just, writing off in our books is sufficient.

Amol S Joglekar

Amol S Joglekar (Expert)
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28 April 2016 yes, it does. because for company, we pay service tax on due basis. In case of company also, you can adjust the payment of service tax in the month when the debt is turned out to be BAD.

Amol S Joglekar

Amol S Joglekar (Expert)
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28 April 2016 The person who is NOT paying anything to you????? It is NOT at all advisable to be FORMALLY also raise credit note. By issuing credit note, you are confirming that the debt is not bad but debt is wrongly raised. Dont try to be over polite with the person who is NOT paying your debt. Right?

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