25 March 2008
Sir please clear the following issues in respect to the given problem. 1- Amount on which service tax shall be charged & when. 2- If balance payment is not received, will it affect the tax liability.
Facts: I am goods transporter i have received 10000.00 advance on 1.1.8 for services , which i had provided to customer on 04.03.08 , total amount of my services will be 60000.00 , and presently i am feeling that he will not pay me 50000.00.
25 March 2008
Service tax is payable only on receipt of payment.You have received only 10000 Rs.so you have to pay service tax only on 10000 Rs.Secondly, service tax is payable on advance payment for which service is likely to be given.Since you have received 10000 on 1.1.8 so you have to pay service tax for that month alongwith interest.
25 March 2008
The liability to pay service tax immediately arises as and when the payment is received irrespective of the fact that actual service for the amount received has been rendered or not. In ur case since u have received Rs 10000 this amount will be considered inclusive of service tax and ur liability towards service tax would be calculated as 10000-(10000/112.36%)i.e Rs 1100. So you are liable to pay Rs 1100 as service tax. As regards ur second part of the question ur service tax liablity will not depend on whether u'll receieve ur balance amount. But however if u receive ur balance amount u w'll again have to discharge ur service tax liabilty in the same manner as is calculated above treating that receipt as including service tax. Regards Prasad.R
CAclubindia
