Payment of tax under gst, Goods and Services Tax - GST

[THYAGARAJAN KALYANASUNDARAM]

Dear expert,

We are running a tax consultancy firm and registered with the service tax department and discharging the taxes on the receipt basis, because our turnover less than 50 lakhs p.a.

My question is if we receive the payment from the clients, against which we raised the invoices and rendered the services prior to appointed day.

1. How to discharge the service tax liability since this receipt may continue more than 1 year. Whether should we pay existing tax or new gst on the services rendered and invoices raised before appointed day.

2. The final return of service tax is between April2017 and June 2017, then how to declare my receipt transaction under GST regime which relates to existing law.

Kindly clarify me. Thanks in advance.

Posts / Replies

[KASTURI SETHI]

If service is provided before or on 30.6.17 and invoice is issued before or on 30.6.17 and only payment is received on 1.7.17 or after 1.7.17 (may be one year), that payment is subject to Service Tax and and to be accounted towards ST and NOT towards GST. Accounting Codes meant for for Service Tax cannot be closed as so many past cases pending decision would result in deposit of Service Tax.

[KASTURI SETHI]

In continuation of my reply dated 23.7.2017, it is added that Govt. may make provisions in the GST Rules for deposit of Service Tax into GST.

During the year 2015, when HE and SHE Cesses were abolished, Govt. allowed to transfer the credit on these cesses into BED. Ed. Cesses in Central Excise sector were allowed to be used in BED in respect of invoices which were issued on or before 28.2.15 and goods(inputs) were received on 1.3.15 or after 1.3.15. Similarly, in respect of Service Tax Sector, credit on Ed.Cesses were allowed to used in BED in respect of those invoices which were issued on or before 30.6.15 but input services were received on or after 1.7.15.

[MARIAPPAN GOVINDARAJAN]

As indicated by Shri Sethi GST will not attract in your case. In my opinion you may pay the amount as and when received. There is no instruction whether the facility of payment of service tax in the erstwhile system may continue or not. In the course of audit if any short payment is found out it should be paid along with interest. In such cases the payment is to be made in the service tax system only. In my opinion service tax for the erstwhile period will continue up to five years since the audit can be conducted for the vouchers relating to five years. You may file return for April to June 2017 as per your payment received and paid details.

[subramanian vijayakumar]

Pot two things issue of invoices and completion os services were made before AD hence It. Does not have concern during gst earlier. Law. Wiil. Apply

[HimansuSekhar Sha]

Why do you discharge s.tax on receipt basis when you have completed the service and submitted the invoice. Please clarify.

[KASTURI SETHI]

Because their turnover is less than 50 lakhs in a financial year.