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Service tax!!! payment?

SANJAY (CHARTERED ACCOUNTANTS) (938 Points)

25 August 2011

1. Will anybody clarify me that whether service tax is payable on receipt of payment or on making provision of income or on invoice date??

2. Again what in case of GTA, if we are reciepient of service and makes payment of frieght???

Please reply soon!!! its urgent!!

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7 Replies

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 25 August 2011

from 01-04-2011 service tax become payable on issue of invoice, or advance receipt of payment which ever comes earlier.

service receipent is liable to pay service tax in case of Goods transport Agency services.

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RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 25 August 2011

DEAR MR SANJAY VERMA,

As per the new point of taxation rules, service tax will have to be paid on raising of the invoice or advance payment whichever is earlier. This is with effect from 01.07.11 (upto 30.06.2011 optional though the rules has into effect from 01.04.2011.)

Regarding GTA, (i) Factory registered under or governed by Factories Act,

(ii) Company established by or under the Companies Act,

(iii) Corporation established by or under any law,

(iv) Society registered under the Societies Registration Act or similar law,

(v) Company-operative society established by or under any law,

(vi) Dealer of excisable goods, registered under the Central Excise Law, or

(vii) Any body corporate established or partnership firm registered by or under any law.

All the above persons are liable to pay service tax on receipt basis. i.e 25% of the freight bill amount. In some cases fleet owners like TCI, Gatge Patil, S.E roadways etc, are collecting the service tax in the bill itself and hence for such bills the liability does not arise. Please check up your lorry people whether they are registered under the Service tax Act?

rengaraj r.k

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surender (Manager Accounts) (149 Points)
Replied 25 August 2011

Agree with Renagraj

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Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 25 August 2011

Pl see the point of taxation rules on which there is an article in the articles section.

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Ratan Chauhan (Sr. Executive Auditor) (53 Points)
Replied 26 August 2011

I agree with Mr. RENGARAJ Ji

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SANJAY (CHARTERED ACCOUNTANTS) (938 Points)
Replied 26 August 2011

Thanks to all my dear friends... Now my question regarding GTA is that whether the service tax payable at the time of payment of frieght or at the time of goods recieved/invoice recieved?? Please clarify soon..

CA Unnikrishnan Nair N (Chartered Accountant) (2083 Points)
Replied 26 August 2011

For GTA service point of taxation is payment of freight. But if payment has not been made within 6 months from date of bil, then date of bill is the point of taxation.