Income & Expenditure Statement of an Individualof an Individual

Is it happens Sushma?? If yes, then both of them r liable to service tax. X will charge to the client & y will charge to X. In turn, X will take credit of service tax as an input service.

Hi Satish,

Say the amount of fees is Rs.10,000/-. At 10% service tax, the net amount receivable by Y is Rs. 9,000/- & what abt X? will he get input credit of Rs.1,000/- on Rs.10,000?

In that case, X will have a benefit to the extent of service tax portion for every client right?

Mr. Vijay, Pls go by your Bank Pass book and take all income you have earned during the year to right hand side of a "T" shape formatt and all expenditure to Left hand side of the same "T" shape formatt. Do the totalling and differnce it by surplus or deficit. Prepare a Statement of Affairs in a "T" shape formatt taking all assets to Right hand side of the formatt and all liabilities to left hand side of the same "T" shape formatt. Go ahead .........all the best.

 To Sushma,

Both will be liable for service tax on their own billings however if there total billing for the year (TAKING SEPARATELY)is below Rs.10 lac they both can get away with it i.e. there is no need for them to charge service tax

 To viyay ji,

Sir please specify if you are running an individual business or some charity work.Any ways plz find an attached document herewith to further help you

I request all other sr. members to amend it if it lacking something

Hi Sushma, it seems there is some confusion in ur mind. After completion of work Y will charge to X, Rs. 10000+1030 (service tax thereon @ 10.30%). In turn, X will charge to the client, say 12000+1236 (service tax thereon @ 10.30%). When X will receive the money from client, his liability will be crystalised. Also when he pays to Y, he is entitle to avail and utilise cenvat credit. Y will pay to the government Rs. 1030 and X will pay to the governemnt (1236-1030) = 206. I hope u understood this example

Dear Vijay

you Can make Income & expenditure account as per following

Income & Expenditure Account
for the period of ……………………….
Expenditure	Amount	Income	Amount
To Telephone Expenses		By Income from Fees received
To Salary Expenses		By Income from Bank Interest
To Postage & Courier		By Income from Rent
To Rates & Taxes		By income from Royalty
To Conveyance Expenses
To Misc Expenses
		To Excess of Expenditure over  Income
		(Balance Figure (trf to B/s)
To Excess of Income over Expenditure
(Balance Figure (trf to B/s)
Total	0	Total	0

Balance of this account should be c/f to Balance Sheet. Balance either Expenses over  Income or Income over expenses.

Hope this will help you

 

If there is any confusion please mailed me at raj_eshgoyal @ yahoo.co.in

hey satish,

There is no problem if X is billing more amount to client than what Y is charging to X. But the issue is Y is charging say Rs.10,000/- on X. X is also billing the client same amount. he is not charging anything extra as commission or something. then my question is why is X doing this? when he doesnot have any benefit. so there will be some benefit to X. what benefit is that. Is it evading any tax? that i want to know..

Why X would have done this business evenif there would not have been any service tax??? Nobody would have charged and X would have got just 10000 and he would have paid it to Y as it is. then why X should do this business?? you only answer keeping in view if there would not have been any tax on such services.

Do the totalling and differnce it by surplus or deficit. Prepare a Statement of Affairs in a "T" shape formatt taking all assets to Right hand side of the formatt and all liabilities to left hand side of the same "T" shape format.

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