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Service tax

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Querist : Anonymous

Querist : Anonymous (Querist)

28 August 2012 Dear All,

I have a doubt regarding service tax, can we show revenue after net off service tax in profit and loss. As per AS 9 revenue should be recognized at gross. But, a company, is showing revenue at net and not claiming any service tax as expenditure and shown in notes that revenue is net of taxes. It is objected by IT dept. Dept suggested that add it to revenue and claim exp. can any one explain what are tax implications by adding this to revenue and deducting as expenditure ?

As per my knowledge, as per revised sch VI only excise duty only net off with revenue and remaining taxes should not be net off

can any one suggest on this ...

thank u

sri rama krishna mallela

sri rama krishna mallela (Expert)
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28 August 2012 the sevice tax componant is not required to include in sales figure as it represents the liability towards government, this can be explained with an example.

for example a service provider provided service worth rs. 100 in total including service tax of rs. 10 the the entry to be passed is as follows,

debtors a/c dr
to liability service tax 10
to revenue from service 90

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