case study

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04 February 2009 respected sir i hv a case study plz provide me the answer of following case study, suppose the question carries 5 marks in CA final examination:

on 1-4-08 a company receive advance regarding service which is to be provided in the month of oct,08; which is non-taxable on the day of reciving of advance hence no service tax is to be paid but as on 1-8-08 govt.make this service taxable with effect from 1-08-08 now at wht time assessee has to pay tax, wht will be due date. Answer this case study with the help of Service tax laws and Rules.

Thanking you

Sangam Aggarwal

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04 February 2009 As per service tax act service tax is payable on the receipt basis and not on accrual basis. so in your case you have to pay service tax on the receipt of advance. Because in normal case someone raise the bill he is not required to pay the service tax. He is required to pay service tax on the receipt of payment.

CA.Sangam Aggarwal

CA.Sangam Aggarwal

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05 February 2009 Respected sir thanks for reply
sir i want to kindly attract your attention on the point that at the time of receipt of advance service which is to be provided in futur is not taxable so, payment of service tax at the time of receipt does not arise, now question is this before providing service central govt. made such service taxable.
i know that service is taxable what is time limit of payment of service tax and under which section and rules this liability created by finance act,1994.

thanks

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