Ravindra (Accounts Manager) 23 January 2010
We are the manufacturing company & service provider company. I would like to know whether can we avail the service tax credit on purchase booking in our book of account. or only after making the payment of the said bii. i.e.if i have a service provided bill in Nov. & I paid the bill in Jan. so whether the bill service tax credit will be available in Nov. or in Jan. pl explain
Varun.T.K (CA Final, CS Executive) 23 January 2010
Source...The logic is simple.....When current asset(In this case) decreases, there must be a corresponding increase in assets or decrease in liabilty. That is when debtors decrease, we should have received cash(Increase in Asset). If debtor is a supplier whose has already dealt with us, his account cr.balance will get decreased(Decrease in Liability).
It means that we have received fund from that transaction, and hence the same is source.