CA Balram Sharma (CA) (839 Points)
05 December 2009Service tax liability is occer when the amount of service and service tax has been received, I have provieded the taxable service but i haven't received any amount.
Should i have to made the provision of service tax in the books of account on the services i have provided in the accounting year ending or not.
CA. MOBIN SAYYED
(Sr. Team Leader)
(114 Points)
Replied 05 December 2009
Yes. Our accounts are based on accrual system. Although no actual liability arises but recognition of service income on accrual basis permits u to do so. Morever that liability cannot be added u/s 43B.
Regards
CA Vichitra Trivedi
(Job)
(40 Points)
Replied 06 December 2009
Yes sir, u have booked income from service provided on accrual basis, so u have to make a provision for service tax on the basis of maching concept & accual basis of a/cing.
As per AS-29 Provision should b recognised when:
a) an enterprise has a pesent obligation as a result of a past event,
b) it is probable that an outflow of resources embodying eco. benefits wil b required to setle d obligation, and
c) a relible estimate can b made of the amt of the obligation.
CA Balram Sharma
(CA)
(839 Points)
Replied 09 December 2009
Hello friends well ,
What should be accounting entries this case,
CA Balram Sharma
(CA)
(839 Points)
Replied 09 December 2009
Futher suppose i would not able to recover the amount from my client.
by the virtue of this my service tax liability will not arise, what should be treatement of my provision made by me,
CA. MOBIN SAYYED
(Sr. Team Leader)
(114 Points)
Replied 09 December 2009
CAclubindia
