As per the service tax rules, registration needs to be done if turnover of services exceeds Rs. 9 Lacs and service tax needs to be paid if turnover of services exceeds Rs. 10 Lacs.
For example, I have a client whose turnover for last year was Rs. 8 Lacs and this year in the first quarter itself the turnover has exceeded Rs. 12 Lacs. No bill has been issued with applicability of service tax. What provisions would be applicable. Please suggest. Are any sorts of penalties attracted?
Your client is required to pay the service tax on the amount exceeding 10 lakhs i.e Rs 2 Lakhs irrespective of the fact that he hadn't recovered such tax from his client as under service tax the SERVICE PROVIDER is liable to pay Service Tax. In order to recover such tax from his clients he has the option to issue supplementary invoice.
- Ruben Balooni
No penal provisions attaract?
And how practical is issuing supplementary invoices?
Penal provision will be attracted on non payment of dues. The SERVICE PROVIDER is under an obligation to pay the service tax on the taxable services provided. Lets suppose your client is a non-corporate assessee so in his case he is required to pay his dues by 5th/6th of the next month following the end of quarter during which taxable services were provided, if he fails to pay the dues by the due dates as mentioned above then he is liable to pay interest u/s 75 (18%) along with penalty u/s 76 (Rs 100 per day or 1% per month, whichever is higher subject to maximum of 50% of service tax).
It is very much practical to issue supplementary invoice as it is a normal thing which happens in business.
- Ruben Balooni
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
View Details
Naveen Fintech Pvt Ltd
Kolkata
CA Inter
View Details
CAclubindia
