Transition

[Kavita Sharma]

Sir,

I want to elaborate my previous query, the payments are outstanding as on 30.06.17. Service tax was already charged in the bills and not on accrual basis. Since turnover was less than ₹ 50 lacs, the service tax was being deposited on receipt of payments against the bills. Now, when the service provider will receive the payments against the outstanding bills (as on 30.06.17) after 01.07.17, then how the service tax would be deposited under GST?

[KASTURI SETHI]

As per my understanding the issue, taxable service was provided prior to 30.6.2017 and assuming invoice was issued prior to 30.6.17 and only payment including ST is to be received in post GST period. Payment pertains to the pre-GST period. In my view, ST can be deposited under relevant ST code and Cess codes after 1.7.17. Nomenclature of Govt.dues will remain Service Tax and NOT GST.

AI Summary

Service tax on pre-GST receipts remains payable under service tax codes when collected after GST implementation. Receipts received after the GST commencement that relate to services provided and invoiced before that date should be treated as attributable to the pre-existing levy and may be deposited under the relevant Service Tax and cess codes; the tax nomenclature remains Service Tax rather than GST.