Input Service Tax Credit
This query is : Resolved
06 October 2009
For utlization of input service taxa gainst liab., first the payment to vendor needs to me done of the invoice amount and service tax amount.
In case of advance payment to vendors, how the same to be dealt with?
In case of advance payment to vendors, how the same to be dealt with?
06 October 2009
As per the law, credit can be taken only on the strength of an invoice raised in terms of Rule 4A of the Cenvat Credit Rules.
If the service provider raises a bill/invoice for the advance amount, credit can be taken.
If the service provider raises a bill/invoice for the advance amount, credit can be taken.
06 October 2009
My query is something else, e.g.,
Adv Payment = Rs 1,000
Invoice Value = Rs (600+60=660)or (1100+110=1210)
Whether the credit of Rs 60 or 110 can be taken. Conidering the fact no clearing entry has been passed in SAP.
Adv Payment = Rs 1,000
Invoice Value = Rs (600+60=660)or (1100+110=1210)
Whether the credit of Rs 60 or 110 can be taken. Conidering the fact no clearing entry has been passed in SAP.
06 October 2009
Dear Sandeep,
I am confused with your query. Further, clearing entry in SAP is a technical/internal matter and I am not competent answer.
An hypothetical example is given. Advance paid Rs. 1000, final amount Rs. 2000.
two bills can be raised by the service provider.
1. Bill Amt = Rs. 906.00
ST = Rs. 94.00
Total = Rs. 1000.00
2. Bill Amt = Rs. 2000.00
Less Adv. =Rs. 906.00
Balance = Rs. 1094.00
ST = Rs. 112.00
Total = Rs. 1206.00
on retirement of respective bills take credit of Rs. 94 & Rs. 112 as the case may be.
There can be other solution as well. Let us wait for more opinion.
I am confused with your query. Further, clearing entry in SAP is a technical/internal matter and I am not competent answer.
An hypothetical example is given. Advance paid Rs. 1000, final amount Rs. 2000.
two bills can be raised by the service provider.
1. Bill Amt = Rs. 906.00
ST = Rs. 94.00
Total = Rs. 1000.00
2. Bill Amt = Rs. 2000.00
Less Adv. =Rs. 906.00
Balance = Rs. 1094.00
ST = Rs. 112.00
Total = Rs. 1206.00
on retirement of respective bills take credit of Rs. 94 & Rs. 112 as the case may be.
There can be other solution as well. Let us wait for more opinion.
07 October 2009
Vendor would require to raise a bill for the advance for you to avail the credit. SL Naik has explained the same excellently.
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