Calculation of service tax

[chandrashekhar K]

Is calculation of service Tax on accrual basis or payment basis. Are both the methods allowable. Is it possible to shift from one basis to another after adopting eother

AI Summary

Debate on Service Tax: Payable on Accrual or Payment Basis? Clarifications for Associated Enterprises Transactions. A forum discussion centered on whether service tax should be calculated on an accrual or payment basis. One participant stated that service tax liability arises on a payment basis, advising payment on a receipt basis. Another participant clarified that service tax is generally payable upon receipt of service charges, but for transactions between associated enterprises, it is due at the earlier of accrual or receipt. A third participant agreed with the latter explanation, confirming its correctness.