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Service tax

Ainul Haque (Sr.Accountant) (25 Points)

15 November 2012

Dear Members,

If services provided before March-12 & Invoice raised with tax rate @ 10.3% and taxes deposited within time & filed the ST return for the same. After two months invoice has revised with current rate @ 12.36% & excess taxes amount has been deposited. Now i am filling the ST-3. So i am facing the problem where should i show reversal service amount. Please help me.

For e.g- Invoices of Oct-11 raised in 15th Nov-11 for Rs.100000 with tax rate @ 10.3% so tax amount are Rs.10,300.

Now Invoices of Oct-11 has been revised in May-12 for Rs.110000 with tax rate @ 12.36% so tax amount are Rs.13596.Therefor differential tax amount for Rs.3296 had been deposited.

Finally want to know how much amount show in ST-3 form of services provided amount. In the month of May-12.

Please send me replay at accounts080 @ gmail.com

9555401755

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1 Replies

DDDDDD (.) (176 Points)
Replied 16 November 2012

Dear Ainul,

I think you should pay interest for non-payment of ST

First of all lets split up your question into two:

1. Different rate (10.3 & 12.36)

2. Increase in Invoice value

1. Differential Rate: If taxable service has been provided before the change in the effective rate of tax, than the date of invoice or the date of payment which ever is earlier will be taken as the date for determining the tax rate.

As per Rule 3(a) of POT rules 2011 invoice should be raised within 14 days (since this issue is relating to Nov 2011 the POT 2012 provisions are not considered i.e 30 days limit) from the date of provision of service. Otherwise the date of provision of service will be considered for point of taxation. Since in your case invoice is not raised within 14 days. The date of provision of sevice is considered for the purpose of POT. Thus service tax should be paid only at 10.3%

2. Increase in Invoice value:

With respect to the differential amount of Rs. 1 lakh (11 lakhs - 10 lakhs) we should treat it as though the invoice is not raised per Rule 4A of Service tax rules 1994. And POT will be determined as per Rule 3(a) of POT rules.

That is for the amount is Rs. 1 Lakh you should pay interest at 18% from the date of provision of service to the date payment of Service tax