Transaction with the group of units under same management.
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
08 June 2010
Suppose ABC Ltd,a public limited company raise a bill including service tax on a society/trust controlled by the same management.In the book of ABC Ltd it was booked as Income as well as in the book of the society/trust it was shown as expenses.
Since no payment was made by the Society/Trust against such bill,service tax no yet to payable to Govt. by ABC Ltd. and such bill amount laying in the books of ABC Ltd as receivable over one year. Practically such transaction was made to reduce huge profit of Society/Trust. Whether act of the management is correct? Is there any specific circular or notification from service tax authority to prevent such loss of revenue?
Since no payment was made by the Society/Trust against such bill,service tax no yet to payable to Govt. by ABC Ltd. and such bill amount laying in the books of ABC Ltd as receivable over one year. Practically such transaction was made to reduce huge profit of Society/Trust. Whether act of the management is correct? Is there any specific circular or notification from service tax authority to prevent such loss of revenue?
Shyam Lal Naik
(Expert)
08 June 2010
Please refer to Explanation to Rule 6 (1) of the Service Tax Rules, 1994.
In case of transaction between associated enterprise, tax liability arises on making entries in the books of account. Liability would arise in the month/qtr in which the bill is booked in the books of ABC Ltd.
In case of transaction between associated enterprise, tax liability arises on making entries in the books of account. Liability would arise in the month/qtr in which the bill is booked in the books of ABC Ltd.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- GST Audit whether Govt Companies are exempt?
- PTRC Show Cause Notice on Email
- Accounting treatment of AMC alongwith the purchase of Laptop
- Unable to File TDS Q2 Return – New TRACES Portal Error
- Taxation of crypto futures in India Fy 2026- 2027
- Not ordinarily resident having partnership income in India and salary in USA is any form to filed be
- GST Treatment of Purchases with GST Paid where Outward Supplies of Manufactured CattleFeed Exempt
- Condonation Request sec 119(2) b -Enhancement Limit of Leave Exemption prior to AY 2023
- MSME disclosure and disallowance
- Transfer of Physical Stock Between Two Proprietorship Concerns
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
