Service tax on accrual basis

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This query is : Resolved

CA Tejas Andharia (Querist)

15 March 2013 Suppose, some Individual Professional exceeds the limit of gross income of Rs. 50 lakhs in March 2013, then is he required to pay Service Tax on accrual basis instead of cash basis with immediate effect from March 2013? or from April 2013 onwards?

Pls quote some reference of section, rule or case law.

Sumit Grover

Sumit Grover (Expert)

15 March 2013 If in your case, the turnover of the preceeding year doesnt exceed Rs. 50 lakhs, then the option to pay on cash basis will be upto Rs. 50 Lakhs in the current FY & beyond Rs. 50 Lakhs, on accrual basis.

Proviso to Rule 6 of Service tax rules,1994(as amended by N/N 03/2012 dated 17-Mar-2012) states that "in case of individuals and partnership firms whose
aggregate value of taxable services provided from one or more premises is fifty
lakh rupees or less in the previous financial year, the service provider shall
have the option to pay tax on taxable services provided or to be provided by
him up to a total of rupees fifty lakhs in the current financial year, by the dates
specified in this sub-rule with respect to the month or quarter, as the case
may be, in which payment is received.".

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