Advance to contractor

Save Share

This query is : Resolved

Dipul mehta (Querist)

22 October 2013 We hav paid advance to contractor, wen we r liable for service tax payment at d time wen we receive invoice or at d time we made advances..

Ganeshbabu K

Ganeshbabu K (Expert)

22 October 2013 In case of reverse charge mechanism, the service provider as well as service receiver, both are required to pay service tax on advance payment in the ratio as specified for a particular sevice.

Dipul mehta

Dipul mehta (Querist)

22 October 2013 Sir, under rule 7, date of payment can it means advance payment also?

Ganeshbabu K

Ganeshbabu K (Expert)

22 October 2013 Yes it includes advance payment also
.
.
however inform to your contractor he need to issue invoice to you with in 30 days from date of receipt of payment as per rule 4A,3
.
.
Refer articles written in CACLUBINDIA AND SIMPLE TAX INDIA FOR more understanding about POT rules

Dipul mehta

Dipul mehta (Querist)

22 October 2013 Sir, we make january advance and contractor not gv any invoice yet we paid st liablity can now we r liable for any issue

Ganeshbabu K

Ganeshbabu K (Expert)

22 October 2013 Your liability discharged ,..there will be problem with your contractor only,,he not issued invoice correctly,..as per reversecharge he also need to pay service tax as and when he received...refer above replies..
.
.
he should give invoice with in 30 days from date of receipt of payment or date of completion of service

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now