Point of taxation

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Akshit (Querist)
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01 April 2013 q. Date of invoice 10 october amt rs.60 lakhs

However advance is received through cheque on 30 september.Cheque is deposited on the same day and it is credited in the books of accounts on 6 october.

What shall be the point of taxation?Will it fall in the quarter ended september or quarter ended december

(i have this doubt because i read this illustration in a book and answer according to it is quarter ended september.........but i am confused because i read that date of payment shall be credit in books or credit in bank whichever is earlier...books date is not given so i thought it should be date of credit and answer according to my thinking is december)

Please aNSWER THROUGH EXPLANATIONS

CA Priti Surana

CA Priti Surana (Expert)
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01 April 2013 It will fall in 2nd quarter.

"APRIL FOOL"

It will come under third quarter i.e. October to December, as the provision of law is that, the date of entry in books of accounts or credit in bank account, whichever is earlier, shall be the point of taxation. As the amount has got credited into the bank a/c after September, liability to service tax arises in 3rd quarter only. What more explanation do u need, let me know. Your contention is right.

Akshit

Akshit (Querist)
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01 April 2013 Was onfused because the illustration in a book was given so...

Thanks for the clarification

CA Priti Surana

CA Priti Surana (Expert)
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03 April 2013 Pleasure....!

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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23 May 2013 I think you are right as after the amendment in the Service Tax Act it is always on accrual basis. Since you have raised the bill in September you have to account for in Sept. as you have already received the cheque in Sept. Now, ST Deptt. is least bother whether you have received the payment or not once you have rendered taxable services you are liable to pay the ST in the quarter in which services were rendered. Hence it will fall in Sept quarter.

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