Uncleared invoice

Queries 612 views 3 replies

Krishna

Head

25 Points Joined August 2014

Hello All,

I am relatively new to this forum and subject.

I run a business and have recently started collecting service tax from this finacial year. I beleive the collected service tax needs to be filed for every quarter before 5th day of the new quarter month. Now my query lies in, what if there exixts an unlceared invoice and the payment has not been made in the previous quater. Do I still need to file the relevant service tax or can I avoid the same and consider the other following cleared invoices and pay only the amount that I have collected/Cleared invoices.

Professional advice would be much appriciated.

TIA

Replies (3)

Venkatanarayana GM

Partner associate at Hiregange & Associa

1279 Points Joined November 2009

Dear Mr. Krishna,

If your business turnover is less than 50 lakhs (PY) and your running your businees in the capacity of Individual or Partnership firm, then you have the option of making payment on Receipt Basis. And you have also the option of Making payment quarterly and file the Service Tax returns once in 6 months i.e from April to Sept and From Oct to Mar.

This is in accordance with Rule 6 of Service Tax Rules.

Extract of the same is provided for your reference.

8
[Provided also that in case of individuals and partnership firms whose aggregate value of taxable services
provided from one or more premises is fifty lakh rupees or less in the previous financial year, the service
provider shall have the option to pay tax on taxable services 9[provided or agreed to be provided] by him up
to a total of rupees fifty lakhs in the current financial year, by the dates specified in this sub-rule with respect
to the month or quarter, as the case may be, in which payment is received.

Krishna

Head

25 Points Joined August 2014

Dear Mr. Venkat

Thank you very much for your reply.

Just to summarise the whole in a lay man terms, I can omit the uncleared invoices (under the clause proprietorship and below INR 50 Lakhs turnover) and file my returns only for the cleared invoices i.e; the tax I have collected from my clients. Further if so, how do I treat the unclear invoice? Also there are many other invoices that has been raised and cleared post that serial number of the uncleared invlice.

Also can a CA understand this clause and file my returns accordingly without having me to worry much about the same?

Kindly advice.

Venkatanarayana GM

Partner associate at Hiregange & Associa

1279 Points Joined November 2009

Dear Mr. Krishna,

Very simply, once you receive then only your going to make the payment of Service tax. it is immeterial whenever you receive it. (during that quarter you have to consider for making payment) . Rembember ha this option exists only upto the limit of 50 lakhs. Further, that uncleard bills will become baddebts to your firms thats all and nothing to do with them except showing as expense in your Income tax return. as long as service tax provision is considered only when you receive such payment for which you invoiced earlier that time you may need to deposit service tax.

Thanks