Service tax payment on receipt basis
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
15 April 2016
Dear All,
Can i pay service tax on receipt basis ???
If yes, then how will my turnover match to service tax return ???
For Example :
XYZ Company issued invoice for Rs. 1000000/- in F.Y. 2015-16 but they have received Rs.600000/- against these invoices. Then this company will pay Service tax on Rs. 600000/- and they will also show this amount as turnover in the st return. But according to Balance sheet turnover is 1000000/-.
Than How can i reconcile all these things ?
Can i pay service tax on receipt basis ???
If yes, then how will my turnover match to service tax return ???
For Example :
XYZ Company issued invoice for Rs. 1000000/- in F.Y. 2015-16 but they have received Rs.600000/- against these invoices. Then this company will pay Service tax on Rs. 600000/- and they will also show this amount as turnover in the st return. But according to Balance sheet turnover is 1000000/-.
Than How can i reconcile all these things ?
Suresh Ramaswamy
(Expert)
15 April 2016
The Point of Taxation Rules are amended regularly. With effect from 1st April 2011 the point of taxation arises on the earliest of the following occurences:
(a) Date of Completion of Service
(b) Issue of invoice within thirty (earlier fifteen) days from the date of completion - else (a) will be treated as point of taxation
(c) receipt of consideration (in settlement or advance)
whichever is the earliest.
Hence, there is no option to pay service tax on receipt basis, and the full tax will have to be paid in the month of issue of invoice.
(a) Date of Completion of Service
(b) Issue of invoice within thirty (earlier fifteen) days from the date of completion - else (a) will be treated as point of taxation
(c) receipt of consideration (in settlement or advance)
whichever is the earliest.
Hence, there is no option to pay service tax on receipt basis, and the full tax will have to be paid in the month of issue of invoice.
CA. Divyansh Agarwal
(Expert)
17 April 2016
no i m not agree with suresh as there us an option for individual and partnerahip firm whose turnover was less than 50 lacs in previous year can pay service tax on payment basisi however option to be opted for whole year
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