Depriciaition

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 August 2012 A FIRM HAS INSTALLED ITS MACHINERY IN THE MONTH OF FEBRUARY 2012, AND STARTED MANUFACTURING ONLY IN THE MONTH OF MAY 2012.

I WOULD LIKE TO KNOW, WHETHER THEY COULD EXEMPT THEMSELVES FROM CHARGING DEPRECIATION FOR THE FINANCIAL YEAR 2011-12, AS IT WOULD LEAD TO INITIAL LOSSES.

DO SUGGEST WITH VALUABLE OPINION

Querist : Anonymous

Querist : Anonymous (Querist)

24 August 2012 Sir/Mam,
I have a query related to service tax calculation as per the amendments of july-12.
Please answer the mechanism behind the payments & availments of service tax related to manpower supply.

RENGARAJ R.K

RENGARAJ R.K (Expert)
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25 August 2012 Under the reverse charge mechanism, the service receiver (incorporated company)has to pay 12.36% on 75% of the manpower supply agent's bill and 25% will be payable by the agent.

This has to be paid separately by cash in a separate challan and the same challan will be treated as input service document to avail the cenvat benefit and the same can be adjusted while discharging the output tax.

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CA Suresh Jain

CA Suresh Jain (Expert)
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26 August 2012 1. Depreciation is allowable only when not only assest is acquired but also has been put in use.Therefore, you are absolutely correct in not claiming the depreciation in the previous year as you have not put the machinery in use.
2. In your first query you have mentioned that you are a firm and therefore reverse charge mechanism of service tax related to provision of manpower to you is not applicable