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Service Tax issue

Prema (N/A) (24 Points)

08 April 2011

Hi,

I have a very small business and I have not registerd my for service tax 2010 year because Service tax will be charged if overall amount exceeds 10 Lakh in financial year. I will be receiving payment in April 2010 for sevices done in March 2010. If this amount goes to financial year 2010 then I exceed 10 L limit and I have not charged any service tax from the customer but customer is charging TDS from me for March month and will be showing that in 2010 financial year. I want to know if amount received in April (for March month services) will be considered as 2011 (for sevice tax purpose). Please provide some information regarding this.

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3 Replies

CA AMANPREET SINGH (Chartered Accountant) (284 Points)
Replied 08 April 2011

for the purpose of calculating limit of 10 lakh, it will be taken for march month as provisions provide for value of services rendered in previous financial year. thus u will be liable to pay service tax on every service during year 2011-12.

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 08 April 2011

TDS is tax decuted under incometax act, which u can get credit during filing your incometax return,

TDS has not direct nexus with service tax.

Athmaram (Articled Assistant) (170 Points)
Replied 09 April 2011

Originally posted by : Prema
	Hi, I have a very small business and I have not registerd my for service tax 2010 year because Service tax will be charged if overall amount exceeds 10 Lakh in financial year. I will be receiving payment in April 2010 for sevices done in March 2010. If this amount goes to financial year 2010 then I exceed 10 L limit and I have not charged any service tax from the customer but customer is charging TDS from me for March month and will be showing that in 2010 financial year. I want to know if amount received in April (for March month services) will be considered as 2011 (for sevice tax purpose). Please provide some information regarding this.

Dear All,

Point of taxation for Service Tax till 31.03.2011 is considered to be on cash basis ie we are liable to remit tax only if it is collected as you receive the amount only during April 11 even though it is relating to the previous yr it will not be added to verify the basic limit of Rs 10 lakh.

Hence you are not liable to collect service tax for the financial year 2010-11.

But from April 11 point of taxation is changed to due basis. Budget 2011.