One of my client is Advertising agency. Gross Receipt in FY 2011-12 - Rs. 40 lacs During FY 11-12 Rs. 3 lacs debtors were there. Service Tax on same is paid on Accrual Basis (i.e. paid in FY 11-12 itself).
Now as per amendment my client is again eligible for Payment of service Tax on RECEIPT BASIS (As Gross recpt in previous year is less than 50 lakhs ).
My Query : Bill Raised during April - June 12 - Rs.10 lakhs Amount Received during April - June 12 - Rs. 3 lakhs (Totally against o/s balance of debtors as on 31/03/2012.) Not a single penny recd. against current year bill.
Now do i require to file the return of ST for these period? If yes how to show these transaction?
22 November 2012
No service tax is to be paid on amount received during the year, which is outstanding in previous year as service tax is paid on accrual basis.
Now regarding the billing in current year, your client requires to pay service tax on accrual basis only and not on cash basis.
22 November 2012
Thank u viral sir for replying. But why he has to pay Service tax on Accrual basis , as per amendment in Rule 7 of ST Rules he is eligible for payment of service tax on receipt basis.
22 November 2012
sorry . You are right. 4th proviso to rule 6 allows option to payment of service tax on receipt basis to individual and firms with turnover of less than 50.00 Lacs in previous FY
CAclubindia
