07 December 2011
Hi friends iam lateef i have a doubt in payment of service tax if any one body can solve i will b thankful to them.
Last year our company used to pay service tax on Receipt & Payment basis. This year there is a change in law relating to payment of S.Tax from 1st april 2011 we have to pay S.Tax on Invoice basis irrespective of payment received or not. so, my question is shall i follow the Receipt & Payment basis or as per law (which is on invoice basis) if i go with Receipt & payment i will forbid law & If i go with Invoice i will loose consistency. (we have not yet paid any S.Tax for this year from 1st april 2011 it is urgent plz clarify.
10 December 2011
After introduction of POT Rules, 2011, every assesse is required to pay service tax on accrual basis (i.e., on issue of invoice whether payment received or not). These rules have come into force from 01.04.11 but assesse has been given option to follow the above rules wef 01.07.11. So now u have to pay tax on accrual basis whether u received payment or not. If you are following above rules from 01.07.11then you have to maintain records of invoices outstanding as on 30.06.11 and received in current month or quarter, as the case may be, and invoices issued from 01.07.11 onwards and pay tax on sum total of payment received in respect of invoices outstanding on 30.06.11 and invoices issued during current month or quarter, as the case may be, . Remember that if u will not follow the above rules then u have to pay heavy penalty or/and subject to prosecution proceeding (reintroduce by FA, 2011). Therefore it is advisable to follow the rules with utmost care in order to avoid future litigation.
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10 December 2011
The above rules are not applicable in respect of 7 specified services. It means in that case Service tax shall be paid on payment basis.
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