service tax payable not paid

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pradnya (Querist)
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29 September 2010 assessee has collected service tax but not paid.

assessee do not cr service tax to p&l

debtor dr 110
income cr 100
service tax cr 10

now how the effect of 43B will get exercise?

whether rs. 10 will get added back to profit? but assessee is not claiming rs. 10 as expenditure...

pl clarify

CA Suraj Lakhotia

CA Suraj Lakhotia (Expert)
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29 September 2010 The service tax is to be treated as business income and deduction of same is to be allowed only on payment basis. In short the tax not paid is to be added back to the income.

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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29 September 2010 It is not a expenditure, It is a liability, so not crediting in P/L is correct.

If the company is not depositing the service tax, sec 43B doesn't attract. ( sec 43B says expenses deductible on payment basis) Becoz this is the matter of service tax. Service tax deptt. will raise the demand with intt. and penalty.

Kishanlal Paliwal

Kishanlal Paliwal (Expert)
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29 September 2010 For the clarity, the assessee is advised to deposit the service tax collected on his own (suo moto) along with interest @13% P.A., in order to avoid later complication.

Regards
K.L.Paliwal

Message likes : 1 times

O.D.SHARMA

O.D.SHARMA (Expert)
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29 September 2010 Hi,
Pay all legal/Mandatory dues by making ledger scrutiny month end.Also see company is not bearing interest for accountant's work
Liability can't go as income.Pay as advised above,

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