A Service tax Provider raises a invoice on 1st April and gets payment on 25th of september due to delayed bill process by the service receiver. But as per service tax rule company has to pay service tax as per billing date and if not then interest charges will be levied on company.
This has become general practice and all profit margin is going in interest. what is the solution???
Use to pay service tax on accrual basis. Means the month in which you issue service bill, pay service tax as this is liability of the same month.
Dear Sir,
This only the problem that, it is companie's liablity to pay service tax in the same month.
Eg.
A company raised a bill of twenty lacs in a month. service tax @ 14.5% of 20 lacs is two lacs ninty thousand. payments are coming after 3 months atleast. It means 2.9 lacs*3=8.7 lacs. This amount is creating pressure on the copany and resulting decrease in capital.
if we are paying after payments which is after 3 months then service tax department is claiming interest which is again a pressure for no default by the company.
This is the issue.
Sir,
this is the problem with every one and in every revenue department. Whether this is matter of Excise Duty, Service Tax or VAT/CST. You have to pay the taxes in that month in which sales occured. And they have no means with your payment. Even in some cases, if you do not receive the payment or your creditor refuse to pay you, still you have to pay the taxes.
CAclubindia
