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Deferred tax on service tax

Ashish Jain (CA Final) (120 Points)

29 January 2015

Whether AS 22 will be applicable on sevice tax liabilty which is not routed through P&L

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6 Replies

CA Pankaj Kr Agrawal (@Helping Hand) (2143 Points)
Replied 29 January 2015

Hi,

Ashish Jain,

AS 22 Accounting for Taxes on Income:-

DTL/DTA on Timing difference

Difference between taxable income and accounting income for a period that originate in one period and are capable of reversal in one or more subsequent period

In our case:-

for calculation of DTL/DTA, its not main point that whether is it credited or debited in profit & loss account. The main point is that it must be disallowed in income tax computation and capable of reversal in one or more subsequent period.

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Ashish Jain (CA Final) (120 Points)
Replied 29 January 2015

But AS 22 is considered only P&L items not balance sheet item

Ashish Jain (CA Final) (120 Points)
Replied 29 January 2015

I think DTA will not calculated on Service tax Liab which is not routed through P&L

CA Pankaj Kr Agrawal (@Helping Hand) (2143 Points)
Replied 29 January 2015

Ashish Can you please provide me that paragraph where it is mention that AS 22 is only deals with profit and loss account. AS 22 state specifically that only difference between taxable income and accounting income. the difference may be for pl items or bs items.

suraj gahlout (student) (47 Points)
Replied 10 May 2015

See, income will be affected only when it will passes through p&l . service tax will not effect the income or expense until it passes through p&l. Income tax is charged on the item of income as if s.tax directly passes through b/s it will not effect the income so there is no question of timing difference. And no DTA or DTL.