Service tax

Service Tax (Legacy) 1175 views 10 replies

Guest

total bill raised 800000 and advance recvd 50000.

now tax ll b on 850000 or on 844850(50000-10.3%) coz advace alwz inclusv of tax.

plz tl...

Replies (10)

Gaurav Singh

student

496 Points Posted on 25 October 2011

Tax will be on Rs. 50,000.Since,tax is paid only on money received and not on bill raised..

Manish

Accountant

251 Points Posted on 25 October 2011

Plese refer Point of Taxation Rules, 2011 from undernoted table. It is self explanatory :

S. No.	Date of completion of service	Date of invoice	Date on which payment recd.	Point of Taxation	Remarks
1.	April 10, 2011	April 20, 2011	April 30, 2011	April 20, 2011	Invoice issued in 14 days and before receipt of payment
2.	April 10, 2011	April 26, 2011	April 30, 2011	April 10, 2011	Invoice not issued within 14 days and payment received after completion of service
3.	April 10, 2011	April 20, 2011	April 15, 2011	April 15, 2011	Invoice issued in 14 days but payment received before invoice
4.	April 10, 2011	April 26, 2011	April 5, 2011 (part) and April 25, 2011 (remaining)	April 5, 2011 and April 10, 2011 for respective amounts	Invoice not issued in 14 days. Part payment before completion, remaining later

Ram Avtar Singh

Nagari Sultanpur U.P.Delhi

15539 Points Posted on 25 October 2011

Now service tax on Invoice Basis. 10.3 % on 8 lakh

Sheena Maheshwari

ARTICLESHIP

240 Points Posted on 25 October 2011

service tax on receipt basis is no longer applicable except for certain specified services. for the rest it is as per point of taxation and in case of advance it is always taxable on inclusive basis so service tax will be calculated on 844850(50000-10.3%)

CA Unnikrishnan Nair N

Chartered Accountant

2083 Points Posted on 26 October 2011

Sheena is correct. After introduction of Point of Taxation Rule, tax liability arises on accrual basis.

Guest

@ gaurav--2thngs i want to mk clr that 50000 is difrnt from bil raised nd m askng abt tax liablity not tax paid.

@ sheena nd CA unnikrishnan---is 844850 corct? nd cn i assume that 800000 is also inclusive of tax nd 850000 is taxeble??

Guest

bscly i knw dat advanc tax rcv is olwz inclusive of tax...que is abt amt of bil raised....if nthng said thn what to assume???????

lyk in abv que---50000 is inclusv of tax bt wht abt 800000??

Sheena Maheshwari

ARTICLESHIP

240 Points Posted on 27 October 2011

if nothing is mentioned we usually assume tht 800000 would be exclusive of tax so tax would be charged on 844850. however u can assume 800000 is also inclusive of tax and tax would be charged on 765000 i.e. 850000-10%....in both cases you will have to write your assumption in a note.

Guest

thnx dear :)

Ameya Makarand Lonkar

CA Final Student

56 Points Posted on 31 October 2011

I think, if Rs.50000 is different from bill raised of Rs.800000, there should be another invoice against which advance of Rs.50000 is received or it may be the case that the invoice is of Rs.850000 from which Rs.50000 is received as advance.

For exam purpose, advance should always be assumed as Inclusive of Service Tax and for remaining 800000, any assumption is allowed, i.e., inclusive or exclusive.

Practically, 50000 will be taken as inclusive of service tax and no need to make any assumption for 800000 as the facts can be ascertained.

Suggestions and corrections are welcome.