Purpose of collecting service tax on accrual basis

Beneficial to department only...........

its also for stop evasion of tax

Professionals like CA, Advocates, Doctors, Comp Secretaries, ICWAs follow cash basis of A/c. Paying serv tax on accrual basis is only ADDITIONAL BURDEN on service providers. This foolish move is only in the interest of Govt.

Originally posted by : Ashok J
	Professionals like CA, Advocates, Doctors, Comp Secretaries, ICWAs follow cash basis of A/c. Paying serv tax on accrual basis is only ADDITIONAL BURDEN on service providers. This foolish move is only in the interest of Govt.

CA, CWA, CS, legal consultant are allowed to follow cash basis for service tax as per the Point of Taxation Rules 2011, if it is a proprietary concern or partnership firm.... So its additional benefit for professionals.....

But its unavoidable switch for transition to GST... its been postponed so many times.... states are collecting VAT as soon as sales take place...

so to make some progress, there has been change in the union levy than telling states to collect VAT on cash basis.....

All other taxes namely income tax, central excise , vat, customs are payable on accrual basis. The amendment is to have uniformity.

I have been wondering  why no voices  are raised  from the service industry  against the  senseless amendment  of " service payment on accrual basis". 

The service industry is not the trading industry  one must understand ; here , apart from the  small margins,  the  timely settlement of  service invoices is a rarity. 

This  amendment , now , to pay  service tax  irrespective of the actual receipt of service bills shall stfle the already struggling industry. 

Also, the comparison with VAT is totally wrong  as  in a trade dealing one would have a large input tax to  set off with.

I think the  negative  impact of this amendment   on the  working capital of  the service industry has still not sunk in to all. 

I wish that  representation is made  to the ministry by the whole service industry (  I include even our CA, ACS  brethern who have already been exempted) on a massive scale to force  them to back this amendment without any further delay.