02 April 2013
I have a query regarding the date of payment of service tax as per POT Rule. Our company has issued advance annual Port bill for 2013-14 in the month of March, 2013 to different operators. But, no payment has been received till 31st March, 2013. So, Whether we should have been paid entire service tax liability within 31st March, 2013, even though no payment has yet been received & service to be provided is related with next financial year? Please help.
03 April 2013
Yes, the liability arises in the month or quarter in which bills have been issued. No relevance with date of receipt of payment in your case. The liability should have been disposed off within 31st March, 13. Delay shall attract interest @18% p.a.
03 April 2013
Thank u Mam for your reply. But, I want to add one thing. I have read the POT rule of Service Tax. Where it is clearly stated that service tax has to be paid in the month in which invoice is issued. But, it is on the presumption that the service has already been provided. But nowhere in the POT rule it is clearly mentioned that what will be the point of taxation on the issue of invoice for which no service is provided in the month of issue of invoice & for which no payment has been received in the month of issue of invoice. Mam, if we have to pay service tax in the month of issue of advance bill, what will be the journal entry. We can debit sundry debtor for the amount due. but what will come to credit side. "Income Received in Advance". But it is not right as per Accounting Standard. Income Received In Advance can only be credited when corresponding debit will be cash/ bank. then what will be the accounting head. Please clarify.
20 May 2013
In that case you have to issue per-forma invoice and write in the said invoice that on confirmation of the rate and supply of the material bill will be raised and service tax or VAT as the case may be will be charged. If you do so this per-forma invoice does not require any entry in the books and no service tax is payable.
20 May 2013
In that case you have to issue per-forma invoice and write in the said invoice that on confirmation of the rate and supply of the material bill will be raised and service tax or VAT as the case may be will be charged. If you do so this per-forma invoice does not require any entry in the books and no service tax is payable.
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