When service tax liability arises ?

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ANUJ KUMAR GUPTA (Querist)
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24 July 2013 I HAVE RECD RENTAL INCOME OF 8,40,000/- IN F.Y. 2012 - 2013 AND ALSO EARNED A COMMISSION OF 3,00,000/- IN THE SAME F.Y. BUT THE COMMISSION AMOUNT WAS RECD IN. F.Y. 2013 - 2014. SO MY QUESTION IS WHETHER SERVICE TAX IS LIABLE IN F.Y. 2012 - 13 OR IT IS LIABLE FROM F.Y. 2013 - 14, AS RENTAL INCOME FOR F.Y. 2013 - 2014 IS ALSO RS. 8,40,000.00

RENGARAJ R.K

RENGARAJ R.K (Expert)
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24 July 2013 It is okay. Please let us know whether you have raised debit note for the commission. If so, the date of the invoice/debit note is required to arrive at a conclusion based on the point of taxation rules under service tax act.

Also how much you have shown as the rental income and commission income (accrued) in your IT return for the A.Y 2013-14 (financial year 2012-13)

ANUJ KUMAR GUPTA

ANUJ KUMAR GUPTA (Querist)
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24 July 2013 debit note is issued on 31.03.2013 and rental income is shown RS.840000/- AND COMMISSION OF RS.300000/- IN IT RETURN OF A.Y 2013 - 14. ( COMMISSION IS RECD IN THE MONTH OF JUNE 2014)

RENGARAJ R.K

RENGARAJ R.K (Expert)
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24 July 2013 When the invoices are issued within the time limit, the point of taxation shall be the earlier of :

(i)- Date of issuance of invoice.

(ii)-Date of receipt of the payment.

In your case, it is date of issuance of invoice, and hence in my opinion, you will be liable to pay service tax on the income, after availing the first Rs.10 lacs.

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