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Service tax on receipt basis

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This query is : Resolved

pankaj (Querist)

23 January 2015 In case where an assessee has an option to pay service tax on receipt basis whether any interest on service tax will be applicable to him if he has provided service for a year and receipt the amount of that service on the next financial year

CA Parveen Kumar

CA Parveen Kumar (Expert)

24 January 2015 No, as per fourth proviso to rule 6(1) of Service Tax Rules, 1994, some specified assessee has an option to pay Service Tax on receipt basis up to a certain limit.

So, if assessee has option to pay Service Tax on receipt basis and provides service in FY 13-14 and amount received in FY 14-15, then he is liable to pay Service Tax in Y 14-15. No interest will be applicable if he paid Service Tax within the time specified in rule 6(1) of Service Tax Rules, 1994.

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