In the finance act 2011 there is a amendment relagting to service tax that service tax is to paid on due basis not on receipt basis. But i have seen maximum enterprises are depositing tax on receipts basis even after this amendment. what are the consequence they have to face in this case.
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Service Tax taxability
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01 April 2011
Notification No.25/2011 - Service Tax
Ministry of Finance has today issued the above Notification amending Point of taxation Rules, 2011. Rules 7 has been substituted by a new Rule whereby, point of taxation in respect specified service providers which includes Chartered Accountants (individuals or proprietary firms or partnership firms) will be the date on which payment is received.
Other Professionals (as listed below) are also exempted from collecting service tax on accrual basis:
· Architect
· Interior Decorator
· Cost Accountant
· Company Secretary
· Scientific or Technical Consultancy
· Legal Service
In case of security agency services,tax is paid on accrul basis or cash basis
In case of Security Agency Service it is to be paid on billing basis. However, there is an option to deposit service tax on cash basis till 30/06/11.
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