Service Tax April 17 to June 17 & Returns

[Anita Bodhe]

Hello,

I have a query with regard to Service Tax for Q1,April-June 17. With new notification , Returns for the Q1 has to be filed by 15th August 2017.

Service tax is paid on receipt of the payment from client. There are few outstanding of Q1 eg bills were raised in June payment expected in July, so ST otherwise would have been paid in Q2, but now what does one do when the returns have to be filed in August.

Ours is a proprietership firm so, as soon as the payment is received in July, pay the service tax and file return in August is what to be done. Kindly advice.

[KASTURI SETHI]

Assuming that service has been provided prior to 1.7.2017 and invoice has been issued prior 1.7.17 and only payment is to be received in July, 17. You will deposit service tax.

[DR.MARIAPPAN GOVINDARAJAN]

Service tax is payable on accrual basis and not in receipt basis. You have to pay the service tax on or before 6th of the following month during which invoice has been raised. Therefore you ought to have paid the service tax by 6th July 2017. If you have not paid the same the same may be paid immediately along with interest. Return is to be filed on or before 15.08.2017.

AI Summary

Accrual basis for service tax requires tax to be paid when invoice is raised, with returns filed subsequently. Service tax is payable on an accrual basis, not on receipt; it must be paid on or before the 6th of the month following the month in which the invoice is raised. If tax due has not been paid, it should be paid immediately with interest. Returns for the quarter must be filed by the mid August deadline.