what if a service becomes taxable for first time. but advance payment has been received before the date when service becomes taxable.invoice has also been raised before the service becomes taxable.But as per agreement payment was to be done twice in a year. but payment has been received all in one in advnce. In this case whether such amount is taxable or not.if yes then how....?
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Advance payment case of a service is taxable for first time
Replies (2)
I think it is not taxable as the invoice has already been raised and payment is received before such change.
Rule 5: Payment of tax in cases of new services (POTR)
When a service is taxed for the first time, then
- No tax shall be payable to the extent the invoice has been raised and payment received against the same before such service becomes taxable (even though service may be rendered afterwards)
- No tax shall be payable if payment has been received before service becomes taxable and invoice is issued within 14 days from the date when the service is taxed for the first time
thanks but mam as per agreement payment was to be done in august and feb. if it were done according to agreement it would be taxable. can a person violate the terms of agreement.?
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