Service tax on receipt basis
This query is : Open
18 January 2015
As per Point of taxation rules,Individual and partnership firms are allowed to pay service tax on receipt basis upto value of Rs. 50 lacs only if the value of taxable services in previous financial year is Rs. 50 lacs or less.
My question is Whether the above rule of payment on recipt basis upto Rs. 50 lacs applicable to New business entity??
My question is Whether the above rule of payment on recipt basis upto Rs. 50 lacs applicable to New business entity??
18 January 2015
Relevant part of Rule 6 of the Service Tax Rules reads as follows
" Provided also that in case of individuals and partnership firms whose aggregate value of taxable services provided from one or more premises is fifty lakh rupees or less in the previous financial year, the service provider shall have the option to pay tax on taxable services provided or agreed to be provided by him up to a total of rupees fifty lakhs in the current financial year, by the dates specified in this sub-rule with respect to the month or quarter, as the case may be, in which payment is received.
Hence new business entity upto 50 lakhs in the current FY can make payment on receipt basis.
" Provided also that in case of individuals and partnership firms whose aggregate value of taxable services provided from one or more premises is fifty lakh rupees or less in the previous financial year, the service provider shall have the option to pay tax on taxable services provided or agreed to be provided by him up to a total of rupees fifty lakhs in the current financial year, by the dates specified in this sub-rule with respect to the month or quarter, as the case may be, in which payment is received.
Hence new business entity upto 50 lakhs in the current FY can make payment on receipt basis.
18 January 2015
As the new entity will not have any turnover in previous year, still the above rule applies to new entity?
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