Pot for individuals / proprietorship firms
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
16 March 2013
I am a proprietor for a firm which is into video tape production category of service tax. My revenue / income stands below Rs.50.00 lacs for current and preceeding financial year. I want to clarify whether i have option of paying service tax on receipt basis as per the new rules / notifications of service tax.
Is this option available for select 08 individual / proprietorship service providers such as CA, CS, Architect, Lawyers etc. or individuals like me (service provider of video tape production) also have this option of paying service tax on receipt basis.
Is this option available for select 08 individual / proprietorship service providers such as CA, CS, Architect, Lawyers etc. or individuals like me (service provider of video tape production) also have this option of paying service tax on receipt basis.
16 March 2013
Yes dear...if your current receipt is less than 50lacs rupees then you can opt receipt basis as per new rules.
Querist : Anonymous
Querist :
Anonymous
(Querist)
16 March 2013
But i am bit confused regarding this option available to select individuals / proprietors covering 08 specific services such CA, CS, Architect etc. but not video tape production. Please clarify, can i as (video tape producer) opt for service tax payment on receipt basis.
10 August 2024
Under the Service Tax regime, the option to pay service tax on a receipt basis was historically available under specific conditions and notifications. However, with the introduction of GST (Goods and Services Tax) in India, the service tax regime has been replaced by GST, and the rules governing service tax no longer apply.
### **Service Tax Payment on Receipt Basis (Historical Context):**
Before the GST regime, service tax payment on a receipt basis was available under certain conditions for specific service providers. Here's a breakdown:
1. **Option for Payment on Receipt Basis:**
- **Eligibility:** Service providers whose revenue was below a certain threshold limit (usually ₹50 lakhs) had the option to pay service tax on a receipt basis rather than an accrual basis. This means they could pay service tax when they actually received payment from their clients rather than when the invoice was issued.
- **Applicability:** This option was available to various service providers including professionals such as Chartered Accountants, Company Secretaries, Lawyers, and others. It was not uniformly available across all service categories.
2. **Video Tape Production and Other Services:**
- For service categories like video tape production, the option to pay service tax on a receipt basis was not generally available unless specifically mentioned in the applicable notifications or rules.
### **GST Regime (Post-July 1, 2017):**
With the implementation of GST from July 1, 2017, the service tax regime was replaced by GST. Under GST:
1. **General GST Payment Rules:**
- GST is generally required to be paid on an accrual basis, meaning the tax liability arises at the time of issuance of invoice, irrespective of whether the payment has been received or not.
2. **Composition Scheme:**
- For small taxpayers, there is an option to opt for the Composition Scheme under GST if the turnover is below ₹1.5 crore (₹75 lakhs in special states). Under this scheme, a simplified tax payment process is available, but it does not follow the receipt basis and has specific tax rates.
3. **Receipt Basis in GST:**
- As of the current GST rules, the receipt basis is not generally applicable. GST is generally payable based on the invoice date and not on the receipt of payment.
### **What Should You Do?**
Given that service tax has been replaced by GST, you should follow GST guidelines. Here’s what you need to do:
1. **Review GST Applicability:**
- Ensure that you are registered under GST and comply with the GST rules applicable to your service category.
2. **Understand GST Filing:**
- Under GST, you need to file regular returns based on your sales and purchases. GST is payable on the basis of the invoice date.
3. **Consult GST Professional:**
- If you are unsure about the GST compliance or specific provisions applicable to your service (like video tape production), it’s advisable to consult a GST professional or tax consultant for detailed guidance and compliance.
### **Summary:**
- The option to pay service tax on a receipt basis was available under specific circumstances before the GST regime.
- With GST in place, the rules for service tax have changed, and service providers generally need to comply with GST on an accrual basis.
- For any specific queries regarding GST applicability or payment options, consulting a GST expert is recommended.
By adhering to the GST guidelines and seeking professional advice, you can ensure that you are compliant with the current tax regulations.
### **Service Tax Payment on Receipt Basis (Historical Context):**
Before the GST regime, service tax payment on a receipt basis was available under certain conditions for specific service providers. Here's a breakdown:
1. **Option for Payment on Receipt Basis:**
- **Eligibility:** Service providers whose revenue was below a certain threshold limit (usually ₹50 lakhs) had the option to pay service tax on a receipt basis rather than an accrual basis. This means they could pay service tax when they actually received payment from their clients rather than when the invoice was issued.
- **Applicability:** This option was available to various service providers including professionals such as Chartered Accountants, Company Secretaries, Lawyers, and others. It was not uniformly available across all service categories.
2. **Video Tape Production and Other Services:**
- For service categories like video tape production, the option to pay service tax on a receipt basis was not generally available unless specifically mentioned in the applicable notifications or rules.
### **GST Regime (Post-July 1, 2017):**
With the implementation of GST from July 1, 2017, the service tax regime was replaced by GST. Under GST:
1. **General GST Payment Rules:**
- GST is generally required to be paid on an accrual basis, meaning the tax liability arises at the time of issuance of invoice, irrespective of whether the payment has been received or not.
2. **Composition Scheme:**
- For small taxpayers, there is an option to opt for the Composition Scheme under GST if the turnover is below ₹1.5 crore (₹75 lakhs in special states). Under this scheme, a simplified tax payment process is available, but it does not follow the receipt basis and has specific tax rates.
3. **Receipt Basis in GST:**
- As of the current GST rules, the receipt basis is not generally applicable. GST is generally payable based on the invoice date and not on the receipt of payment.
### **What Should You Do?**
Given that service tax has been replaced by GST, you should follow GST guidelines. Here’s what you need to do:
1. **Review GST Applicability:**
- Ensure that you are registered under GST and comply with the GST rules applicable to your service category.
2. **Understand GST Filing:**
- Under GST, you need to file regular returns based on your sales and purchases. GST is payable on the basis of the invoice date.
3. **Consult GST Professional:**
- If you are unsure about the GST compliance or specific provisions applicable to your service (like video tape production), it’s advisable to consult a GST professional or tax consultant for detailed guidance and compliance.
### **Summary:**
- The option to pay service tax on a receipt basis was available under specific circumstances before the GST regime.
- With GST in place, the rules for service tax have changed, and service providers generally need to comply with GST on an accrual basis.
- For any specific queries regarding GST applicability or payment options, consulting a GST expert is recommended.
By adhering to the GST guidelines and seeking professional advice, you can ensure that you are compliant with the current tax regulations.
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