Service Tax

narendrabararia1971

I want to know the exact rule of service tax rounding in India. Navision is rounding all components of service tax individually. Is this correct? What is the current rule of service tax rounding.

saha

Yes, as per service tax rules exact rounding is absolutely correct. But due to our lack of confidence we will always calculte greater than 0.5 as rounding precision.

I will ensure you below mention copied rule from Govt. of India
circular No.CIR/POL/ST/2004-05/200 dated 16th September, 2004 advising actions to be taken by the banks such as registration for payment of service tax, recovery of service tax payable from the customers, collection / payments of service tax, etc. in the matter Service Tax and Education Cess introduced by the Government on financial activities of banks.

In the circular, we had indicated that while collecting or paying service tax, fraction of a rupee up to 49 paise can be ignored and 50 paise and above rounded off to the higher rupee as stipulated under Excise Rules when service tax with cess is separately collected. We have been receiving enquiries from members seeking further clarifications on this issue. In this regard, we enclose a copy of ST Circular 53/2/2003 dated 27th March, 2003
issued by the Government of India, Ministry of Finance (Department of Revenue), Central Board of Excise & Customs (F.No.137/11/2003-CX.4) in the matter of Payment of Service Tax – Rounding off of Service Tax to Multiples of a Rupee, stating that the provisions of Section 37D of Central Excise Act, 1944 has been made applicable to Service Tax Law by virtue of Section 83 of Finance Act, 1994 (as amended).