CA. Rashi Goyal (Chartered Accountant) (512 Points)
31 March 2009Hi,
In the financial year 2007-08 we were providing both taxable & exempted services and availing CENVAT credit under composit scheme. From 01.04.08 the provisions for the composite scheme has been changed. Now we are required to pay 8% on the exempted services. But my query is whether we are required to pay 8% tax on the collection for the services provided prior to 01.04.08.
Madhukar N Hiregange
(Chartered Accountant)
(39034 Points)
Replied 31 March 2009
| Originally posted by :CA. Rashi Goyal | ||
| " | Hi, In the financial year 2007-08 we were providing both taxable & exempted services and availing CENVAT credit under composit scheme. From 01.04.08 the provisions for the composite scheme has been changed. Now we are required to pay 8% on the exempted services. But my query is whether we are required to pay 8% tax on the collection for the services provided prior to 01.04.08. |
" |
CA. Rashi Goyal
(Chartered Accountant)
(512 Points)
Replied 31 March 2009
Hi,
The restriction of 20% has been ommitted from 01.04.08. My query is that we raised invoices for the exempted services in the financial year 2007-08 for which we are recieving collections in the current year. Now my query is whether we are required to pay 8% tax on the collections in the current year or not.
shatrughan sinha
(professional)
(36 Points)
Replied 01 May 2009
| Originally posted by :CA. Rashi Goyal | ||
| " | Hi, The restriction of 20% has been ommitted from 01.04.08. My query is that we raised invoices for the exempted services in the financial year 2007-08 for which we are recieving collections in the current year. Now my query is whether we are required to pay 8% tax on the collections in the current year or not. |
" |
Hello Mr Rashi
Service tax liablity arises on the receipt basis. Merely raising invoice & show the service tax liability in the books doesnot qualify for service tax liability.Though the company has provided in the F.Y 2007-08.The liability of payment of service tax is in the F.Y 2008-09 because the collection been received in 2008-09 & therefore if company opted not to maintain the separate books of accounts in 2008-09,then he has to pay 8% tax on services provided in 2007-08.
atul gupta
(proprieter)
(97 Points)
Replied 01 May 2009
As per my understanding for services provided during 2007-08 before amendment of Rule 6 of Cenvat Credit Rules, 2004, if payment is received after this amendment then amount @ 8% is not payable.
Reasoning for that is : Taxability of service and rate of tax both are determined with referance to the date/period in which service provided, and not linked to the date on which payment received. Therefore Ist issue is whether any amount is payable when service provided, to my understanding NO.
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