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Service tax liability along with interest

Queries 211 views 1 replies

ARINDAM

Manager Internal Audit

167 Points Joined October 2007

Dear Sir/Madam

Wishing all of u very happy new year.

As a developer of construction company provide maintenance facility to the allotees (continuous Service) and raise the bill on yearly basis. suposse for 2015-16(Apri;-March) raises a demand letter of maintenance charge on the month of June 2015 and charge service tax on mainenance service from April2015 to mar2016 & sybsequently paid the service tax whether money recived or not(july2015).Now my question is whether any interest is leviable on April 2015& May2015? if so please plz guide me.

Replies (1)

ankit gupta

CA IN PRACTICE

104 Points Joined July 2008

according to explanation 1 to Rule 6 of POT Rules, in case of continuous services, date of completion of provision of service is termed as date of completion of event as specified in agreement for determination of provision of service over a period of time. In this case, period considered is F.Y. 2015-16 for annual maintenace contract. Therefore, date of provision of service would be 31.03.2016.

Since bill is raised during period of service, POT will be earlier of:

(i) Date of Invoice, or

(ii) date of payment to the extent it is recd.

Since, full service tax liability is discharged within 6 months of date of invoice, there is no violation of service tax rules. Therefore, penalty should not be levied.