Advance received

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 March 2012 We have received advance in the month of March for the services to be invoiced in April.

Taking into consideration Point of taxation rules (Rule 3 with explanation) receipt of advance is point of taxation.

Further Rule 6 (1A) requires intimation of advance payment of Service tax to Superintendent of Central Excise.

So, are we required to make service tax on advance payment and intimate Superintendent of Central Excise??

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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29 March 2012 Yes you have to pay the service tax.

However, this payment is NOT advance service tax.

Advance service tax is service tax paid which is not yet due.

In your case, the service tax has become due on receipt of the amount. Accordingly, it is your liability which you have to discharge before 31.3.2012.

This payment is not considered as advance payment and accordingly you do not need to intimate the excise officer.

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