Service tax if fees recd from students on instalment basis

This query is : Resolved

Jatin (Querist)
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25 March 2016 Dear Experts,

Our Centre provide animation coaching to students.

Students paid fees instalment basis
For Example student paid Rs. 5000 per month
Some times student not paid instalment
Please guide me in respect of Calculation of Service Tax
Instalment due basis or instalment receipt basis

Regards,
Jatin

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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25 March 2016 Service Tax is payable on issue of the invoice or receipt of consideration, whichever is earlier. As far as the rendering of service is considered, it is being rendered regularly by way of coaching classes. In case any invoice is issued to the students, then the service tax is payable on issue of invoice, irrespective of receipt of the fees. In case no invoices are issued and only cash receipts are issued as many clubs / associations do the liability to pay service tax arises on receipt of fees.

Hope I have been able to clarify your query.

Jatin

Jatin (Querist)
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26 March 2016 Thanks sir,
Please note that our centre provide animation coaching to students under Franchisee Agreement
All fees works done on Franchisor portal, portal generate invoice according to installment basis (Even instalment not received)
Please guide me in respect of calculation of Service Tax
Thanks & Regards,
Jatin

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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28 March 2016 If you recover fees on the basis of invoices generated by the franchisor, do you pass on the same invoice to your students. How do you intimate your students of their dues - irrespective of the franchisor's invoice, if the same is not passed on to the students and your centre issues no invoice to students - your service tax liability would be on receipt basis. However, if you issue a proper invoice to each student on your Centre's letterhead / bill with your PAN and STC claiming Service Tax, then the liability is from that date. However if you just intimate the students by a letter that a particular sum is due and payable on such and such date, whether ST is shown separately or not, then that is not an invoice and the liability to ST would arise on receipt basis only.

Jatin

Jatin (Querist)
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28 March 2016 Thank you very much for your very informative reply

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