Wrong credit taken of service tax

This query is : Resolved

CA Nilam (Querist)
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04 October 2013 A Manufacturing company has purchased customized software for Rs 10,00,000/-. Company had taken service tax credit on Rs 8,00,000/- perfoma invoice. After 3 months from taking credit of service tax on perfoma invoice of Rs 8,00,000/-, company receives the actual bill of Rs 10,00,000/-. Now how to deal with this in service tax???

Arun Jain

Arun Jain (Expert)
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05 October 2013 Service Tax Credit can be taken on the date of payments also. You must have made the payments. Suppose if you made the 8 lac payment when you receive Performa invoice of 8 Lac and taken the input credit nothing is to worried about, you just make the balance payment and take balance input credit on 2 Lac too.

If you have made payment in any other way, please let me know.

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CA Nilam

CA Nilam (Querist)
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05 October 2013 PAYMENT HAS BEEN MADE ON VARIOUS DATED VARYING FROM RS 20,000/- TO RS 2,00,000

CA Nilam

CA Nilam (Querist)
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05 October 2013 AND TDS ALSO HAS BEEN DEDUCTED. IT IS NOT A SERVICE SO I DIDNOT UNDERSTAND WHY THE COMPANY HAS DEDUCTED TDS WHILE MAKING PAYMENT.

Arun Jain

Arun Jain (Expert)
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05 October 2013 First whenever you made the advance payment or on the base of performa invoice you can claim service tax by reverse calculation considering payment consist service tax, its allowed from service tax department, second thing if you say its not service why did they charge service tax. you said they charged service tax on invoice. they must have showed it also on performa invoice, and software comes under service tax as they are not physical goods and they also provide kind of assist in implementation and guiding to run the software.

CA Nilam

CA Nilam (Querist)
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07 October 2013 but it is capitalized as intangible assets

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