Service tax reversal

Sowmya ji, if you allow me to answer:

The ST on the same can not be reversed back, as per point of taxation ST is to be charged on grossed up amount (accrual basis) & not on the net amount.

e.g.

1. Mr. X (within 14 days of their transaction) issued bill for Rs.110/- (including ST) on Y, as per accrual       basis Mr. X have to pay ST on full Rs.100/- on 5^th or 6^th of the next month even if  Y does not make payment.

2. Continueing with above example; say credit note is being issued for Rs.10/- then also ST is to be paid on grossed up amount.

So, in this quest. ST can not be reversed back,

 If it is be taken on receipt basis (as it was earlier) then ST can be reversed as amount received is only  Rs.90/-

Here my point is what if Y never make payment, Mr.X has to pay ST.

Members please correct me if I’m wrong…

volume discounts are incentives or indirect way commisson paid to dealers, here the principal invoice taxes are intact plus the amount which is offered as discount attract service tax on commission amount.

Thank you all..

In continuation, what if the credit note issued is adjusted against future billing to the same customer? What will be the tax liability of the future billing? Again on the grossed up amount, or net of credit note issued?