15 June 2010
As per section 68 of the finance Act,1994 read with rules, service tax becomes payable to the credit of the central government only on receipt from client. Service tax though billed but not received, not having become payable to the credit of the central government by virtue of the above provisions,could not be disallowed under section 43B. Further, a service provider is merely an agent of the government, and as such is not entitled to claim deduction on account of service tax and, therefore ,the analogy of sales tax, excise duty etc is not applicable in the case of service tax.
Citation :- ACIT Vs. Real Image Technologies Pvt Ltd 9 DTR 261 (Chennai-Tri).
15 June 2010
In this case please note that if any amount is collected from the parties and kept in the liability side of the balance sheet and was not paid upto the time of filing of Income Tax Return then can the AO add the service tax receipt as a revenue receipt.
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