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Wednesday, 29 May 2013

CA CS CWA to pay Service Tax on Accrual Basis if Turnover exceeded Rs. 50 Lakh

From 01.04.2012 CA, CS, CWA, Advocate, Interior Decorators, Architect, Scientific or Technical Consultants, Consulting engineers to pay Service Tax on Bill Basis if Turnover exceeded 50 Lakh in Previous Financial Year 
With the Amendment in  Point of Taxation Rules, 2011 vide Notification No.  4/2012 – Service Tax dated 17.03.2012 individuals and firms providing eight specified services  who were eligible to pay service tax on receipt basis will now have to on the basis of Date of Bill or Date of Payment whichever is earlier.   However there is an exception to this rule which has been extended to not only these eight service but also to all service liable for service tax vide  Notification No.3/2012 – ST, dated 17-3-2012 which is as follows:-
In case of individual / partnership firms (including LLPs) whose aggregate  value from one or more premises is 50 lakhs or less in previous financial year , the service provider may pay tax on receipt basis upto 50 lakhs  taxable value.  Beyond 50 lakhs, service tax will have to be paid on the mercantile basis on the basis of issue of invoice.
Small scale exemption has also been amended recognizing that the first clearances up to Rs 10 lakhs will be in terms of invoices and not mere payments received.
For computing the above limits, the turnover of the whole entity is required to be summed up and not any single registration.
Eight Specified Services Which were Eligible to Pay Service Tax on Receipt Basis till 31.03.2012 are as follows:-
·         Architect
·         Interior Decorator
·         Cost Accountant
.         Chartered Accountant
·         Company Secretary
·         Scientific or Technical Consultancy
·         Legal Service
Above seven were exempted from accrual basis vide Notification No. 25/2011–Service Tax, Dated : March 31, 2011
.        Consulting engineer services (Included Vide Notification No. 41/2011 – Service Tax, Date-  27th June, 2011)

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