15 March 2010
Service tax is applicable based on Gross services rendered > 10 lacs, but ST is to be paid on receipt basis. but for the applicability of the ST Act, it is accrual basis.
21 July 2025
Here’s a clear explanation for your question about service tax return filing and registration regarding accrual vs receipt basis:
1. When is Service Tax Registration Required? Service tax registration is mandatory if the value of taxable services provided exceeds ₹10 lakhs in a financial year.
For determining threshold for registration, the basis is accrual (i.e., when the service is billed or earned), not receipt.
Since accrued commission exceeds ₹10 lakh, registration for service tax is compulsory for FY 8-9, even if actual receipt is less.
2. Basis for Payment of Service Tax Though registration threshold is on accrual basis, service tax payment is generally on receipt basis (when payment is actually received).
You must pay service tax on the amount actually received during the period.
3. Filing Service Tax Returns Once registered, you need to file service tax returns for every taxable period, reporting both accrued and received amounts as per return format.
Returns are filed monthly or quarterly depending on turnover.
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