06 July 2014
Suppose Xyz Ltd. co. received a renting or hiring motor vehicle service from Mr. A who is an individual. In the books of Co. if company recorded this transaction as: Conveyance Exp a/c Dr. To Cash. a/c So in the hands of company service tax reverse charge liability arise or not on this cash transaction. (Party name does not arised anywhere in the books ) Please reply me for proper guidlines.
06 July 2014
is service tax applicable on service rendered and payment collected in cash? . Yes,definetely Service tax applicable. But if you have not shown cash received in your books and not raised invoice no need to pay service tax . . in the same way . Let me tell you levy of service tax will not depend on cash or bank payment/collection . . . 1)No doubt you are liable to discharge liability under reverse charge if individual given bill infavour of your company . . whether u paid cash for it or cheque for it ,no difference,, . 2)No doubt you are not liable to discharge service tax liability if cab provider gives bill infavour of indivual(employees)no need to pay service tax . . So i can advise u like this . If you don't want to pay reverse charge service tax Better take Bills in the name of your employees and account it as re-imbursement expence paid to them . . No reversecharge levy here . Because service receiver is not company but individual, . So it is the responsibility of service provider to charge service tax on bill ... . . So it is legal way to avoid reversecharge obligations
CAclubindia
