Become a Govt. Certified GST Practitioner. Batch begins 18th Nov. Register Now!

Service tax query

Ramya (Company Secretary) (39 Points)

28 June 2011

Dear members,

kindly advice me on the following,

as per the new amendment of service tax rules, the tax has to be paid on accrual basis. suppose if a company has entered into a contract and receives the payment or billing is done on the quarterly basis, then what is the point of taxation? whether service tax is to be paid on quarterly or at the end of contract?

Thanks in advance.

regards

Ramya S.

Company Secretary

Odyssey Technologies Limited

Reply
Follow
Share

10 Replies

hemant (job) (468 Points)
Replied 28 June 2011

As said by you, company entered in contract and received payment/billing is done on quartely basis so u r case is of continuous supply of service

In a normal situation as per Rule 3 (a), point of taxation will be time when the invoice for the service provided or to be provided is issued ( in u r case quartely) but where invoice had not been issued within fourteen days of completion of service, date of such completion of service will be point of taxation.

Service tax is need to be paid on quartely basis as and when invoice is issued.

1 Like

Upgrade to CAclubindia Pro. Subscribe Now!

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 28 June 2011

Originally posted by : hemant
	As said by you, company entered in contract and received payment/billing is done on quartely basis so u r case is of continuous supply of service In a normal situation as per Rule 3 (a), point of taxation will be time when the invoice for the service provided or to be provided is issued ( in u r case quartely) but where invoice had not been issued within fourteen days of completion of service, date of such completion of service will be point of taxation. Service tax is need to be paid on quartely basis as and when invoice is issued.

AGREED

1 Like

CS,CA F,Numrologi TusharSampat (CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert) (85930 Points)
Replied 28 June 2011

Originally posted by : hemant
	As said by you, company entered in contract and received payment/billing is done on quartely basis so u r case is of continuous supply of service In a normal situation as per Rule 3 (a), point of taxation will be time when the invoice for the service provided or to be provided is issued ( in u r case quartely) but where invoice had not been issued within fourteen days of completion of service, date of such completion of service will be point of taxation. Service tax is need to be paid on quartely basis as and when invoice is issued.

AGREED.

1 Like

ramesh (DGM) (506 Points)
Replied 28 June 2011

service tax to be remitted earlier of these,

1. payment schedule as per contract

2. money received

3. invoice raised

4. work completed

1 Like

Ramya (Company Secretary) (39 Points)
Replied 28 June 2011

dear ramesh sir,

could u tell me the effective date service tax payment as per latest amendment.

Upgrade to CAclubindia Pro. Subscribe Now!

CS,CA F,Numrologi TusharSampat (CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert) (85930 Points)
Replied 28 June 2011

It is 5 th of next month normally bt if electronically to be paid then its 6 th of next month.

1 Like

Vikas (CA) (1135 Points)
Replied 28 June 2011

The said notification is applicable from 01.04.2011 or 01.07.2011, whichever is convinient for you.

And the payment has to be made when the bill the raised or money is received, whichever is earlier.

1 Like

ramesh (DGM) (506 Points)
Replied 28 June 2011

This is as per amendement, as per as per Rule 3 (a), point of taxation and continuous supply of service, whichever is earlier of the following,

1. date of payment as per payment schedule in the contract or

2. date of money received or

3. date of invoice raised or

4. date of work completetion

1 Like

M. N. JHA (CA) (8316 Points)
Replied 28 June 2011

Thanks to all my doubt also clear in this forum. . . . .

(Guest)

I n ur case it is quarterly basis..

but in case if a person has not received payment after payment of service tax .then u can take the adjustment to the extent of such default.As service tax is liable 2 b paid purely on receipt basis..weather it is advance receipt or receipt after providing service.