Payment of service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 June 2012 is the payment of service tax is on receipt basis or Accrual basis ?
is there the relaxation for the payment of service tax on receipt basis ?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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06 June 2012 In case of individual / partnership firms (including LLPs) whose aggregate value from one or more premises is Rs.50/- lakhs or less in previous financial year , the service provider may pay tax on receipt basis up to Rs.50/- lakhs taxable value. Beyond Rs.50/- lakhs, service tax will have to be paid on the mercantile basis on the basis of issue of invoice. Please refer notification 3/2012 dated March 17,2012.

RENGARAJ R.K

RENGARAJ R.K (Expert)
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06 June 2012 Your question is coming under "point of taxation" Rules. There are eight specific services for which the point of taxation is the date of payment and for others this benefit is not extended. This specific relaxation is for individuals and partnership firms as explained by Mr B.Chackrapani Warrier. Also see the clarifications issued vide Ministry's D.O.F No.334/1/2012 dt 16.03.2012.