Liability under service tax

[Bakul Gandhi]

1. For debit or credit to an associate Concern, the service tax is to be paid immediately. The invoices, either for services rendered or services received, are booked at the prevailing rate on the date of transaction and service tax is paid on the basis of that rate. Later at the time of actual receipt or payment, exchange rate is higher. Does this affect the service tax liability? 2. The assessee applies and get one registration for Service Renderer and Service Receiver. The half yearly return is to be filed is one or two separate- one as Service Provider and other as Servcie Receipient.

[Surender Gupta]

The amount booked in the the books of account on the basis of prevailing rate of US$ should be final. The different due to fluctuation of currency should not affect the liability of service tax. Hence, in my view, no service tax is payable on difference amount.

[Surender Gupta]

Regarding your second query, a single return would be sufficient. Only an annexure for each service would be attached with ST-3 return.

AI Summary

Service tax liability determined by booking date rate, not exchange fluctuations; single return suffices for dual-role entities. A query was raised regarding service tax liability when exchange rates fluctuate between the time of booking transactions and actual payment or receipt. The response clarified that service tax should be based on the rate at the time of booking, and fluctuations should not affect the liability. Additionally, for an entity registered as both a service provider and receiver, a single half-yearly return is sufficient, with annexures for each service attached to the ST-3 return.