Calculation of service tax, 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

Posts / Replies

[balasubramanian n]

Service tax liabilty arises on payment basis. There is no bar on making payment in advance.It is advisable to make payment of service tax on receipt basis.

[V Ramanujam]

Service tax is payable on the basis of 'receipt' i.e at the time of receipt of service charges. However, if the transaction is between 'Associated enterprises' (as covered u/s 92A of IT Act), service tax liability is to be discharged at the time of accrual/receipt whichever is earlier.

[DKKOTHARI]

View expressed by V Ramanujam is correct.