29 October 2011
Can anyone explain which of the following notification is applicable. a. Notification 19/2008 which states service tax liability arises when expense is booked (w.e.f 2008) b. Notification 18/2011 superceeded by notification 25/2011 states that the liability arises only for expenses booked after 30th June 2011.
We have made a provision payable to our affiliated entity in the month of march 2011. Will we have to pay service tax liability as per notification no. 19/2008 or at the time of payment as per notification no. 18,25 /2011.
29 October 2011
Since the liability was booked before the point of taxation rules came into effect, the service tax shall be paid at the time of actual payment.
29 October 2011
Notification 19/2008 is applicable to transactions entered into with an associated enterprise.
In such a case, the service tax liability arises at the time of booking the expenses.
Have you done a transaction with an associated enterprise? If yes, then N/N 19/2008 is applicable and service tax was to be paid at the time of booking the expense.
29 October 2011
Yes but it is applicable to transactions entered into after 30.06.2011. It is not applicable retrospectively.
When you entered into the transaction, N/N 18/2011 was not applicable. At that time N/N 18/2008 was applicable. Accordingly, service tax was to be paid at the time of booking the expense.
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