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Accounting system

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12 May 2010 Dear Sir/Madam

Is this possible that we adopt Mercantile accounting system at the time of accounting and for service tax pay cash recd bases ???


pls. tell

12 May 2010 Possible.

Taxation is a creature of statute and governed by statutory provisions. Since the liability for payment of service tax arises on receipt basis, the tax shall be so discharged, irrespective of the method of accounting.

The only exception is transaction between associated enterprise.

12 May 2010 Service tax is payable on the basis of Receipts of Invoice amounts. So it is possible.


12 May 2010 That mean our books in Service Tax Balance in 31st March10 credit but we not pay in next month due to payment not recd till april 10

am i correct ???

12 May 2010 Correct.



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