Service tax- point of taxation

This query is : Resolved

ANJANA BABU GUNTUPALLI (Querist)
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17 October 2012 if a service provider(X) entered into a contract with service receiver(Y)to provide a taxable service for about 12 months (1/4/2011-31/3/2012) for 20 lakhs. on 1/4/2011 Y paid as an advance payment to X of Rs. 400000/- .after the end of the first quarter (31/6/2011) X has to pay service tax. he, in mean while provided service to Y. so what is the taxable amount and point of taxation for the first quarter only.

NITIN SHARMA

NITIN SHARMA (Expert)
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17 October 2012 IN THE REVERSE CHARGE OF SERVICE TAX THE POINT OF TAXATION IS INVOICE AND THE INVOICE MUST ISSUE WITHIN THE 30 DAYS OF COMPLETE OF SERVICE AND IN THE CASE OF CONTINUING SERVICE THE IF INVOICE NOT ISSUE WITHIN 30 DAYS THAN POINT OF TAXATION IS 30TH DAY OF SERVICE START.

ANJANA BABU GUNTUPALLI

ANJANA BABU GUNTUPALLI (Querist)
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17 October 2012 actually sir , i was asking that, on what amount is service provider is liable to pay tax? and why?

NITIN SHARMA

NITIN SHARMA (Expert)
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17 October 2012 HE HAS TO PAY THE INVOICE AMOUNT INCLUDING VAT BECAUSE HE HAS OPTED COMPOUNDING IN WHICH THE SERVICE AND MATERIAL PART CAN NOT BE IDENTIFIED SO CAN NOT CHARGE VAT ON IT.

ANJANA BABU GUNTUPALLI

ANJANA BABU GUNTUPALLI (Querist)
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17 October 2012 sir, if suppose service provider is issuing invoices based on the completion of service. then , here in this case he issued for three months, but got the payment for 4lacks as advance only. and the contract is for 20 lacks. which is taxable for the first quarter? either 20 lacks/4 lacks/based on invoices issued?

NITIN SHARMA

NITIN SHARMA (Expert)
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17 October 2012 THE TOTAL OF INVOICE ISSUED FOR THREE MONTS IS TAXABLE.

ANJANA BABU GUNTUPALLI

ANJANA BABU GUNTUPALLI (Querist)
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17 October 2012 then what about advance money received?

NITIN SHARMA

NITIN SHARMA (Expert)
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17 October 2012 IF TOTAL SUM OF INVOICE IS GRATER THAN ADVANCE THEN THERE IS NO ISSUE IF THE TOTAL SUM OF INVOICES IS LESS THEN ADVANCE THEN ADVANCE MONEY IS TAXABLE.

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