Applicability of service tax - recognition or advance basis

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..... Applicability of service tax - recognition or advance basis
Query (Issue) Started By: - Rahul Bagaria Dated:- 3-2-2010 Last Reply Date:- 13-2-2010 Service Tax
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Service Tax
In m .....

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..... y opinion service tax should be paid on revenue recognisation and not on the advance payment.This is in context with advance premium received by an insurance company and its liability to pay service t .....

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..... ax.Service tax should be paid only on the revenue recognisation and not on advance payment of premium Reply By Rama Krishana: The Reply: As I remember the history, initially the service tax was payab .....

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..... le on accrual basis. But later on demand from the service providers, it has been modified and service tax was set to be paid on realization of amount of taxable services. If the whole scheme of servic .....

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..... e tax is analyzed at one go, it is better that legislature should give an option to the assessee to pay either on realization basis or accrual basis. But once the option is exercised, the same should .....

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..... not be allowed to be changed for the lifetime of the assessee, since reconciliation is the big problem. Moreover, where as your issue of service tax on advance is there, as long as service is payable .....

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..... on receipt basis, the scheme of service tax on advance appears to be correct.
Discussion Forum - Knowledge Sharing .....

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