Please Help: how to show ST payable due to judgement in ST Return?
Posted Date : 06-Jan-2012 , 02:58:31 pm | Posted By Dilbagh Singh
Plz clarify:
Recently according to a case law, now it is confirmed that service tax is applicable on service of renting of immovable property.
After this judgement my client got service tax from his tenant for the last 2 years in lump sum. My question is that how to show this fact in Service Tax Return because the Service Tax is received for the service of last 2 years and it became payable now (on receipt of service tax). Should I enhance the value of service in current return (to cope with the value of service tax) or previous returns should be revised??
Recently according to a case law, now it is confirmed that service tax is applicable on service of renting of immovable property.
After this judgement my client got service tax from his tenant for the last 2 years in lump sum. My question is that how to show this fact in Service Tax Return because the Service Tax is received for the service of last 2 years and it became payable now (on receipt of service tax). Should I enhance the value of service in current return (to cope with the value of service tax) or previous returns should be revised??
Category : Service Tax | Answers : 2 | Comments : 1 | Hits : 704
Answers
Answer By: Ashish Karundia
Dear Dilbagh,
Please show the arrears of service tax deposited under the head 'Other amount deposited' i.e. column 4A(I)(d) of the service tax return i.e. ST-3. Further, you are not required either to revise the previous returns or to enhance the value of service in the current return. Furthermore, you need to understand one thing that service tax is payable when any amount is received towards the service and in such cases it will be assumed that the amount received is cum tax. In other words, you cannot say that the tax becomes payable when the amount of service tax is received.
In short, you can show the amount of arrears of service tax under the head 'Other amount deposited' i.e. column 4A(I)(d) of the service tax return i.e. ST-3.Hope the above suffice.
Please show the arrears of service tax deposited under the head 'Other amount deposited' i.e. column 4A(I)(d) of the service tax return i.e. ST-3. Further, you are not required either to revise the previous returns or to enhance the value of service in the current return. Furthermore, you need to understand one thing that service tax is payable when any amount is received towards the service and in such cases it will be assumed that the amount received is cum tax. In other words, you cannot say that the tax becomes payable when the amount of service tax is received.
In short, you can show the amount of arrears of service tax under the head 'Other amount deposited' i.e. column 4A(I)(d) of the service tax return i.e. ST-3.Hope the above suffice.
Answer By: Ashish Karundia
Dear Dilbagh,
A few points which needs to be noted by you..
1. Service tax is payable on accural basis i.e. completion of service/raising of invoice/receipt of advance, which ever is earlier (barring few exceptions i.e. Rule 7) after the introduction of Point of Taxation Rules, 2011 with effect from 01.04.2011.
Further, if a matter is in dispute, it doesn't mean that the liability to deposit the tax is not applicable unless the levy is struck down by the Apex/Supreme Court. Further, if you see the judgments given by the various High Courts, you will find that the levy has been held to be constitutionally valid with retrospective effect. In other words, the service provider i.e the landlord is liable to deposit the tax along with interest.
Hope the above suffice.
A few points which needs to be noted by you..
1. Service tax is payable on accural basis i.e. completion of service/raising of invoice/receipt of advance, which ever is earlier (barring few exceptions i.e. Rule 7) after the introduction of Point of Taxation Rules, 2011 with effect from 01.04.2011.
Further, if a matter is in dispute, it doesn't mean that the liability to deposit the tax is not applicable unless the levy is struck down by the Apex/Supreme Court. Further, if you see the judgments given by the various High Courts, you will find that the levy has been held to be constitutionally valid with retrospective effect. In other words, the service provider i.e the landlord is liable to deposit the tax along with interest.
Hope the above suffice.
Comments
Dilbagh
10-Jan-2012 , 11:45:02 amDear Ashish, Thanks for your reply…Its really useful..!!!! Service tax is payable on cash basis..i know that thing ..but in this case the matter of applicability of service tax on service of immovable property was under consideration in the court..so unless the judgment came; neither the service tax was collected from the tenant nor the value of service was shown as inclusive of service tax..!! Thanks once again for your reply and thanks to admin too..!!