Question XYZ Ltd. gives the Consulting Engineering Services to the client, the total amount due from client was Rs. 10,00,000/- including service tax against 4 to 5 nos of bills since last two financial years. Client has made the payment of Rs. 8,00,000/- as a full & final payment in the current year against all above bills. Following entry was passed by the company at the time of bills raised in books of accounts:- By Income a/c --- To Client a/c --- To Service tax payable --- Company is showing service tax payable amount on total amount in last two years financials. In view of the above case please answer the following questions:- (a) Taxable value & Tax Payable in current year ? (b) Adjustment of service tax payable which shown in last year financials (c) Accounting entries (d) Relevant service tax rule for reference
09 December 2011
a) the income is 8 lacs only, and the tax payble will depend upon various other factors as deductions claimed by the assessee etc. b)treatment of the service tax payable will depend upon which financial year it is ? as the rules keeps changing. Notification No. 3/2011-ST Dated 01-03-2011
09 December 2011
Thanks for notification, Anurag G
But can we w/back the the amount of service tax payable (govt liability)in current year on payment short received (10,00,000 - 8,00,000 = 2,00,000) which was booked in previous year at the time of income arise/invoice booked.
09 December 2011
Asumming that this situation existed when POT 2011 rules were not there. Actully we have to w/back it as inr 2 lacs not received is a sort of bad debts. there is no need to revise the earlier ST3 returns, changes will be done it acounts only.
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