Service Tax on Down Payment

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Chintan (Querist)
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05 May 2010 I want to know if service tax is to be paid when customer makes down payment. If yes, then how is it treated.(please provide journal entry if possible)

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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06 May 2010 Service tax on receipt basis only. if you are received the payment in advance also need to pay service tax. for making service tax please keep separate account

Dr: Serivice tax Advance payment A/c
Cr: Bank A/c
and further

you can adjust the same

while raising the invoice

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