Recovery of service tax arrears from customer

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Dear All,

I have a Query regarding the above Topic. Our Co. Started Business of IT Services in Oct 2011 and started getting the Payments for such services form Nov Onwards. Up to 10.00 Lacs of Fees we did not recovered the Service Tax. But afterwards from Feb Onwards we charged service tax and raised invoices charging service tax. We also recovered the Service tax not charged from Oct to Jan 2011. Now my question is:

1. For the arrear recovered from customer, how will in enter the amount in books and do we need to raise another invoice claiming only service tax for previous periods or we need to modify the previous invoices. But we raise the previous invoices it will be default of non payment of service tax on time and will arise a penalty and interest.

2. How will i show the arrear recovered from customer in Service Tax Return.

Hoping for an early reply.

 

Replies (1)

1.  you may treat the invoices raised during the period OCt - Nov as inclusive of service tax and for this period calculate service tax and deposit with interest. Hence no need to change the invoice.  (ie. Invoice raised earlier for Rs.100/-. Treat the same as inclusive of tax i.e. 90.66 + 10.34 = 100.  Deposit Rs.10.34 with interest. If return already filed with error, revise the same.

2..The invoices to be raised towards recovery of service tax (i.e.Rs. 10.30) will be breaked in taxable value  and service tax on taxable value (9.34 + .66 = 10).  the service tax so charged should be deposited as per normal procedure.

Hope the same clarifies.


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