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Service Tax

Pratik K (Student) (3406 Points)

03 July 2009

Assume that the tax rates for the Service Tax was 10% when a client has paid 6 months advance amount for the services. i.e.2206 (including 206 as service tax)

But after 2 months the Service Tax rate has been increased to 12%.

Now, can Service Provider ask for additional service tax on advance amount paid?

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5 Replies

Abhishek Goel (job) (32 Points)
Replied 03 July 2009

the rate of service tax is applicable of the period when the service is provided ie. if the service in the period when the rate was 10% the the service tax shall be charges @ 10% nothwithsatnding when the invoice is made

niket (Articled Assistant) (63 Points)
Replied 03 July 2009

Originally posted by :Pratik K
"	Assume that the tax rates for the Service Tax was 10% when a client has paid 6 months advance amount for the services. i.e.2206 (including 206 as service tax) But after 2 months the Service Tax rate has been increased to 12%. Now, can Service Provider ask for additional service tax on advance amount paid?	"

In the instant case, the tax rate is charged for first two months at the rate of 10% and after it it is calculated at the rate of 12% plus education cess. As the service receipient paid tax advance at the old rate that is 10% in the given case, the difference amount of service tax can be laibility of the service receipient. Hence service provider can ask for additional service tax on advance amount paid.

Pratik K (Student) (3406 Points)
Replied 04 July 2009

that means that Service Provider can ask to pay service Tax.

Then is it possible in reverse situation.

i.e. Service Tax paid @ 12% and then tax rate reduced to 10%.for the above case.

Now can consumer demand for Service tax refund from Service Provider ?

Madhukar N Hiregange (Chartered Accountant) (38934 Points)
Replied 05 July 2009

NO as the ST is applicable for service provided as well as services to be provided. On advacne the ST canbe paid. Later changes will make no difference.

udaykumar (artical sheep) (38 Points)
Replied 16 July 2009

Dear Friends Pls conform me the Service tax on Service can taken before registration Ex: the company Provide the Service in the month of April -2008 Rs 2,00,000/- and Registered in June 2008 we can pay ST on the Amount which we cant collect Tax & also we can take Cenvat Credit on month April Pls Guide me