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Interest under service tax

Dipen (article) (458 Points)

27 May 2015

Dear All,

Taxable service for 2014-15 crossed 9 lakhs and total amounted to 10,30,000. However the registration of service tax obtained in the month of May i.e 25th May,2015. Since taxable service in previous financial year was less than 50 lakhs, service tax is to be discharged on receipt basis. Now for liability of March 2015, invoice and payment will be made after registration date i.e 25th May 2015.Will there be any interest liability for March since payment not yet received because invoice not raised.

Thanks in advance.

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2 Replies

YOGESH (STUDENT) (128 Points)
Replied 29 May 2015

There is no concept of payment to be done on cash basis or mercantile basis, the assessee has to check Point of taxation under following 2 Situations

1. if the Invoice is raised within 30days, the Point of Taxation will be Date of Invoice or Date of Payment recived whichever is earlier.

2. if the invoice is not issued within 30 days, then the point of taxation will be Date of Completion of Service or Date of Payment Received whichever is earlier.

In the instant case the POT and date of payment of service tax will be the Important for applicability or non applicability of Interest on Service Tax.