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Advance recd. invoice

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This query is : Resolved

CA Shruti kuchhal (Querist)

02 May 2012 As per Point of taxation rules, 2011 POT will be date of invoice or advance payment whichever is earlier.

As per provisions of Rule 4A of FA 1994 Service provider has to issue invoice with in 14 days of completion of service or reciept of advance.

My query is that when advance is recd. whether the invoice will be issued of the whole amount of taxable service or only to the extent of advance.

In reality it is a general practice to issue invoice only to the extent of the advance but i am confused in theortical terms what should be done.

CA NIKHIL OZA

CA NIKHIL OZA (Expert)

02 May 2012 As point of tax would b the date of advance, as such issuing d invoice on whole amount would make u liable to pay s.tax on whole amount so its better to issue only of advance amount...

CA Shruti kuchhal

CA Shruti kuchhal (Querist)

02 May 2012 Thanx very much that in practical life is true but i mean to say that if i have to go theortical as per law than wat shud be the amount as theortical as per law is different from practice

Hope i am able to clear myself

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