Service tax issue

Queries 547 views 5 replies

Atul Kumar

working employee

153 Points Joined July 2009

Dear Friend

This is a General query Please give me logic and lawful reply as i am working in construction co. we have 2-3 project under process no one is at completion stage that why we are recognising Profit on proportionate basis and as per service tax notification service tax will be paid on accrual basis. in my company we have to raise demad to customer for installment. according to law we need to book s. tax as i raise demand and deposit the tax accordingly but as per practical level if we passed the entry in tally or any software it became part of advance from customer now at end of year if we recognising profit advance from customer will take in considerantion whether it receive or not.

our boss telling me to passed the entry of demand in sofware that create the problem for us we are advicing them to we may mentain the record to demand in excel and will pay the s. tax accordingly but he is not ready how we resolved this problem. please give logic answer

Replies (5)

Ajit kumar Dubey

Taxation Manager

637 Points Joined September 2008

Your query is not clear.Please be precise. I accept that service tax is also to be paid on advance and it may also happen that I don't get the money from the customers in time. But where is the problem.?

Atul Kumar

working employee

153 Points Joined July 2009

my query about the entry in sofware once we passed the entry in software (like tally ERP) we increase the customer receipt whether it is receive or not at the time of balance sheet we recognise wrong profit. so what is the solution we need to maintain all the demand in excel seprately passed the enty in tally. which is not good.

Ajit kumar Dubey

Taxation Manager

637 Points Joined September 2008

where in Accounting standards has it been said that for reflecting profit in the P&L it is necessary to receive the same amount before the end of that fiscal. Bills has to be booked irrespective of whether the amount is received or not in that same fiscal year. I would not suggest accumulating demands in excel and then posting the same in the accounting software.

Atul Kumar

working employee

153 Points Joined July 2009

that why i told previously that please give me logical answer your all advice is currect the problem is that we have 3 project in which almost 2500 customer and demand is goes to each and every customer accordingly and timely if we enter demand in accounting software then at the time of possion it creat a lot of problem for us to identify the actual receipt. (if any amount not received).

Ajit kumar Dubey

Taxation Manager

637 Points Joined September 2008

Why don't you route it through debtors or customers account in the B/S. In that way you will be able to control in the system that how much money has been received from which customer.