Services specified for receipt basis or accrual basis

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 July 2015 Dear Sir,
I Have a query regarding service Tax that Which are the services specified for Receipt Basis or Accrual Basis. I Know that for Accrual Basis limit is Rs. 50 Lakh but i want to know that this limit is for all services or for some specified services. Please Let me know.
Thanks
Gaurav Chauhan

Querist : Anonymous

Querist : Anonymous (Querist)

11 September 2015 Dear Sir, I Have a query regarding service Tax that Which are the services specified for Receipt Basis or Accrual Basis. I Know that for Accrual Basis limit is Rs. 50 Lakh but i want to know that this limit is for all services or for some specified services. Please Let me know. Thanks
Gaurav Chauhan

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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25 July 2025 Hi Gaurav,

Regarding **Service Tax payment on Receipt Basis vs Accrual Basis**, here’s the clarity you need:

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### 1. **Accrual Basis (General Rule)**

* Normally, **service tax is payable on the value of taxable services "on accrual basis,"** i.e., when the service is provided or invoice raised, whichever is earlier.
* This applies **to all services** by default.

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### 2. **Receipt Basis (Optional Scheme for Small Taxpayers)**

* **Receipt basis means service tax is paid only when payment is actually received from the customer.**
* The **Government introduced an optional scheme to pay service tax on receipt basis for certain services and eligible service providers.**

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### 3. **Eligibility & Limit for Receipt Basis**

* This option is **available only to service providers whose aggregate value of taxable services is up to Rs. 50 lakh in the preceding financial year.**
* This **limit of Rs. 50 lakh is for all taxable services combined**, not per service.

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### 4. **Services Allowed for Receipt Basis Payment**

* **Not all services qualify** for receipt basis payment.

* **Specified services under Rule 6(3) of the Service Tax Rules, 1994**, are eligible.

* Some of the common eligible services include:

* Transport of passengers by stage carriage, contract carriage, or radio taxi
* Services provided by travel agents
* Services by advocates
* Services by arbitral tribunals
* Services by Chartered Accountants
* Services by Property Dealers
* Services provided by Restaurants, etc.

* (This list is illustrative; you should check the latest notifications or Rule 6(3) for exact list.)

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### 5. **Services NOT eligible for Receipt Basis**

* Generally, services like **Banking, Insurance, Telecom, and others** are **not eligible** for receipt basis payment.

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### Summary:

| Payment Basis | Applicable to | Limit | Services Covered |
| ------------- | --------------------------------------------------- | -------------------------- | ----------------------------------- |
| Accrual Basis | All taxable services | No limit | All services |
| Receipt Basis | Only eligible service providers with turnover ≤ 50L | Rs. 50 Lakh (preceding FY) | Specified services as per Rule 6(3) |

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If you want, I can help you with the exact list of services eligible for receipt basis or provide the relevant Rule references.

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**Would you like me to share the official rule and notification links?**

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