THE SERVICE TAX IS ON THE AMOUNT COLLECTED NOT ON THE AMOUNT BILLED:
The billed turnover of the small service provider for the 1st year was above 10 lacs but the receipts from his customers was below 10lacs. so that he had not paid any service tax and submit the nil return.
In the 2nd year, the small service provider has started billing with service tax as he cross the limit of 10 lacs in the 1st year and the receipts from his customers for the 2nd year includes the amount billed without service tax in the 1st year.
Whether the service provider has to pay the service tax for the total amount collected [ie. amount collected with and without service tax] OR he can deduct the amount billed without service tax and pay only for the amount collected with service tax.
Which method is correct?
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