10 October 2007
Explanation 2 of s.43B states clarifies the meaning of words " any sum payable" means a sum for which the assessee incurred liability in the previous year even though such sum might not have been payable within that year under the relevant law
Reading s.43B and Explanation 2 together Will the service tax on the uncollected invoices be disallowed u/s 43B??
When is liabilty for service tax incurred?? When the invoices are collected or when the Invoices are raised for services rendered??
Please Note : Rule 6 of Service Tax Act, substituted from 16.10.1998 clearly provides that service tax is payable only on the value of taxable services recieved during any calender month
But I really need advice to my argument. Mr. Ravikumar the matter that you gave me was really helpful to me but the same was not enough to convince my view.
I want a clear picture whether the service tax will be disallowed u/s 43B?? I feel it should not be disallowed
Please refer this case law: Label of charge as tax or fee is not conclusive of its character. It is only if any amount becomes payable by way of tax, duty, cess or fee, that it falls within the purview of section 43B - CIT v. Udaipur Distillary Co. Ltd. (No. 1) [2004] 134 Taxman 398/268 ITR 305 (Raj.).
Section 43B is for disallowance of expenditure claimed . When there is no claim for allowing a deduction/expenditure , section 43B will disallow what????
Now whether you have claimed the service tax as expenditure????
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