Dear Experts!
I have a question for service tax calculation.
I know I must register for and collect service tax when revenue crosses 10Lakhs.
I regsietred for service tax number when my revenue for financial year was 8Lakhs, because a client insisted I have service tax.
I collected Rs. 12000/- service tax from that client only, I did not collect service tax from anyone, now at the end of the year my revenue is at 14lakhs.
How much service tax should I pay?
1) Only what I collected? that is Rs. 12000/-
2) On the total revenue since I registered for service tax? That is 14-8=6 lakh? that is Rs. 74160/-
3) On the total revenue for that year that is on 14Lakh? that is Rs. 173040.
I would like to pay the first option, but I should have collected tax after registring so I am ok with option 2 also. But my acountant insists that it is the 3rd option, which I find illogical as I was never sure if my revenue would cross the threshold of 10lakhs, so I think it is 74160?
Also not this is for FY 13-14, what penelty and what interest would be applicable?
CAclubindia
