We are doing Yarn Sales Commission agency business. We are getting Commission in every 6 months once. At the time of commission receipt our supplier is deducting any unpaid amount from his customer (marketed by us) will deducted and paid balance commission amount.
1) We are commission agency - A
2) Customer Yarn supplier - B
3) Buyer Yarn buyer - C
Eg: 1) Sales commission receivable from A - from April 15 to September 15 - Rs.10,00,000/-
2) Buyer -C Not paid yarn purchased balane amount Rs.2,50,000/- for January 2015.
3) Debit note received from A for non payment of C Rs.2,50,000/-
4) Commission Amount Received from A - Rs.7,50,000/- in April 2016.
My Quaries:-
1) We have paid Service tax upto February 2016. Can we adjust that deducted amount's(Rs.2,50,000/-) service tax in March 2016 Service tax payable?
Eg: 1) March 2016 Service Tax payable Rs.72,500/-(Rs.5,00,000 /- @ 14.5%)
2) Deducted amount service Tax Rs.36,250/- (2,50,000/- @ 14.5%)
Kindly clarify as per Service tax act can we eligible to adjust. If possible please give notification or caselaws and as per above said our adjustment working is correct.
P.Panneerselvam
CAclubindia
