Section 43 b

Tax queries 600 views 4 replies

saurav aggarwal

student

77 Points Joined March 2010

Ques 1) Sales tax is a liability or expense for an assessee.

Ques 2) As per sec 43B of IT Act, " Notwithstanding anything contained in any other provision of this Act*, a deduction otherwise allowable under this Act in respect of—

a) any sum payable by the assessee by way of tax, duty, cess or fee, (by whatever name called, under any law for the time being in force);

Now my question is, if sales tax is a liability then how non payment of sales tax can be disallowed.

if sales tax is a liability then how come allowed or disallowed question raise.. sec 43 deals with " deduction otherwise allowable"

Replies (4)

Member

Management

325 Points Joined February 2010

Depends on whether ST is passed through your profit and loss account or not. If it is, then you credit sales tax collected to the profit and loss account and claim it as an expenditure when you actually pay the collected amount. Most of the time, however, ST is part of sales and not shown seperately as such. Normally all expenses are allowed on accrual basis and the expenses in 43B are exceptions, being allowed only on actual payment.

CS,CA F,Numrologi TusharSampat

CS CA F Numerologist Astrologer Graph

85935 Points Joined May 2010

AGREED AND REMEMBER TAX IS NOT AN EXP BUT A CHARGE ON INCOME TO EARN IT INCUDING SALES TAX ON SALES EARNED.

Natesh Navada

Chartered Accountant

149 Points Joined August 2009

As per sec 145A of Income tax Act prescribes inclusive method of valuation. Accordingly Sales tax will be an expense and hence sales tax unpaid will be disallowed u/s 43B.

Natesh

CA Gopal Somani

Associate Consultant at Infosys Ltd.

464 Points Joined June 2010

Sales tax is certainly an expense for business. And according to Sec.145A it is included in the calculation of profit and loss of business hence sec.43b applies on sales tax.

@ Tushar sampat :-Tax is also expense. all expense are chargeon income. All payments made to earn income are expenses and all expense are charge against profit/income.

Correct me if i am wrong..