service tax

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This query is : Resolved

john (Querist)

28 June 2007 sir i get a huge amount for aproject to be executed as advance money.after wards as the projrct progress they are billed.so when is service tax to be charged .initaliy or when invoice is raised.

Abhisek Konar

Abhisek Konar (Expert)

29 June 2007 when the invoice is raised ie after the service is rendered

Shashi Mohan Jha

Shashi Mohan Jha (Expert)

30 June 2007 Service tax is levied on "Serviec Provided" and when the amount billed got collected. There is no provision for payment of service tax on the advance payments.

CA Prasanna Krishnan V

CA Prasanna Krishnan V (Expert)

02 July 2007 The right answer is different. As per Sec 66A of the Finance Act 1994 w e f 18.04.2006 service provided or to be provided are covered by service tax net.
Though invoice is reqd to be raised only within 14 days from the date of service, the advance received to be subjected to cum tax working and service tax has to be paid to comply with Sec 66 A read with Sec 68. Cum tax working is permitted by Sec 67 (3) ibid.

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