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Allowability of service tax paid

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Querist : Anonymous

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Querist : Anonymous (Querist)
29 September 2012 My client pays service tax on a reverse charges basis.

The entry passed is,

Service Tax Paid Dr
To Service Tax payable

Is the service tax paid allowed as an expenditure under the Income tax act.
The client has no output tax to have the amount adjusted.
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CA Navin Jain

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CA Navin Jain (Expert)
29 September 2012 yes, it will be allowed as expenditure under income tax act.
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CA.Vinita Gupta

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CA.Vinita Gupta (Expert)
29 September 2012 Yes it will be allowed under Income tax act. Agreed with Navinji
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CA Suresh Jain

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CA Suresh Jain (Expert)
30 September 2012 The accounting entry is also correct account head may be changed to "Service tax (RCM) Paid A/c."

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