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M.Shanmugasundaram (Accounts)     03 November 2015

Service tax - payment (invoice or receipt)..?

Dear Sir,

CCTV Camera Installation Service Charges Rs.10000+ Service Tax 14% Rs.1400=Total Rs.11400 bill is raised on 10.10.2015. 

But payment is not received upto 03.11.2015.

How much tax need to pay on 05.11.2015...?

1) Can i want to pay service tax for Invoice amount (or) Receipt amount...?

2) Invoice Raised on 10.10.2015. But payment will be received on after 05.11.2015. Now how much want to pay..?

Regards,

M.Shanmugasundaram



 9 Replies

Niraj Kumar Sinha

Niraj Kumar Sinha (Sr. Officer, SPSIL)     03 November 2015

This will be taxable in that month in which invoice is raised to the party. In your case full amount rs. 1400 will be paid up to 05/11/2015.

M.Shanmugasundaram

M.Shanmugasundaram (Accounts)     03 November 2015

Dear Sir,

If customer not paid the full amount, what can i do..? How to adjust the amount..?

Now i paid the full tax amount (10000x14%=) Rs.1400/- on 05.11.2015.

But customer paid to me Rs.8000/- only. How to adjust the balance amount..?

MURLI MANOHAR AGARWAL

MURLI MANOHAR AGARWAL (proprietor)     03 November 2015

Payment of Service Tax on cash basis: Individuals, proprietary concerns, partnership firms, Limited Liability Partnerships (but not HUFs) whose total value of taxable service is Rs.50 Lakhs or less in the previous financial year can opt to pay service tax on receipt basis instead of accrual basis. For example, Mr. Provider raises an Invoice for Rs.50,000 towards services for the month of Feb 2015. He can pay service tax on this amount, only after he gets the money from the receiver. Suppose, the receiver defaults in tax payment, Mr. Provider needn�t pay service tax. I.e. If the service provider is an individual, proprietorship firm, LLP or partnership firm then it is optional for the service provider to pay service tax on receipt basis. But in case of company and HUF and others, it is mandatory to pay service tax on accrual or receipt basis whichever is earlier.. So plan accordingly..
MURLI MANOHAR AGARWAL

MURLI MANOHAR AGARWAL (proprietor)     03 November 2015

Yes you have to pay Rs. 1400 as service tax irrespective of the amount you received provided that you are liable to pay on accrual basis.. Bad debts are not allowed as deduction from service tax. If the amount of invoice is renegotiated due to deficient provision of service or due to terms of the contract (for example: contingent on the happening or non-happening of a future event), the tax will be payable on the revised amount. This is subject to the excess amount either refunded or a suitable credit note issued to the service receiver. However, concession is not available for bad debts. Thus, even if your client does not pay you, you are required to pay service tax. But I personally feel that this issue is debatable.
AMBUJ SHARMA

AMBUJ SHARMA (CHARTERED ACCOUNTANT)     03 November 2015

you have to pay rs. 1400 as service tax as service tax liability is payable on accrual basis.

Karthik.V.Kulkarni

Karthik.V.Kulkarni (Chartered Accountant)     04 November 2015

You need to pay rs 1400 by 5.11.2015, if your taxable services in previous year is less than 50 lacs then this year till 50 lacs you can pay on recepit basis. But if thats not the case and you pay rs 1400 now but if your client only pays rs 8000 you can issue credit note and take credit of balance amount.
Ashpak Ali

Ashpak Ali (Finance Accounts Manager)     04 November 2015

Dear You have raised the Bill for the amount 10000/- It mean that you have provide the service to your client for the same amount. So you will pay the service tax rs. 1400/- on or before 05.11.2015. And after that  your clinet pay to you gorss up Rs.8000/- then balance amount account as bad debt and charge to profit and loss account. from it you can save your income tax. 

ANUP GUPTA

ANUP GUPTA (KEEP SMILING fcaanupgupta@gmail.com)     05 November 2015

IF you have a doubt about the receipt, Pay service tax on rs. 8,000 by making reverse calculation and revise bill

or secondly, u may issue credit note in your books for the balance.

If later u receive the same then deposit the service tax accordingly. no harm...

No invoice detail required to sent in service tax return

omprakash gupta

omprakash gupta (selfemployed)     25 March 2017

Expamle question

A company turnover is Rs 30 crore. A issue the bill on 25/03/2017 to B Company of Rs 5 Crore plus service tax @ 15% then the service tax liablity is Rs 75 Lacs and B company will make the payment after 90days then how to adjust. if A company dont have fund of Rs 75 Lacs to clear the Service Tax Liablity

Please tel me the solution 


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