Where to report non chargeability of service tax.
This query is : Resolved
CA Sahil Sharma
(Querist)
05 November 2012
It is a case of company duly registered & covered under the provision of Service Tax. The company has charged the service tax on some of the services as per the applicable rate but failed to charge the service tax in some cases though it was applicable on that.
Please advise where & how this kind of violation of the provisions of the service tax may be reported in the Audit Report under the provisions of Companies Act 1956 & Income Tax 1961 ,by an Auditor.
Please advise where & how this kind of violation of the provisions of the service tax may be reported in the Audit Report under the provisions of Companies Act 1956 & Income Tax 1961 ,by an Auditor.
Sanjiv Dandona
(Expert)
05 November 2012
It appears the company is a Service Provider. A Service provider is liable to pay Service Tax on the Services provided by it ( unless full or a part of the liability passes to Service Reciever under Reverse Mechanism which in case of a service provider being a body corporate is generally not the case) notwithstanding the fact that it failed to charge the same from the client.
Hence it is a case of default of discharging a statutory liability and should be accordingly treated. The company should provide for this liability.
It appears the company is a Service Provider. A Service provider is liable to pay Service Tax on the Services provided by it ( unless full or a part of the liability passes to Service Reciever under Reverse Mechanism which in case of a service provider being a body corporate is generally not the case) notwithstanding the fact that it failed to charge the same from the client.
Hence it is a case of default of discharging a statutory liability and should be accordingly treated. The company should provide for this liability.
CA Sahil Sharma
(Querist)
06 November 2012
Thanks sir,
But my question is that whether auditor is required to pointed out this kind of voilation in his audit report under the compliance of Companies Act 1956, if YES, then where?
Is it hitting the concept of "TRUE & FAIR" as per companies act?
But my question is that whether auditor is required to pointed out this kind of voilation in his audit report under the compliance of Companies Act 1956, if YES, then where?
Is it hitting the concept of "TRUE & FAIR" as per companies act?
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