SERVICE TAX ON ADVANCE RECEIVED

 

Query: Service Tax on Advance Received Contractual Work

We are a contractor having work value of 100/- and service is to be completed in 3 years, whereas before providing complete Service for that work, we have received full consideration of 100/-.

Now my question is that without raising any bill and without providing complete Service (i.e. service to be provided) are we liable to pay Service Tax on the amount received in full?

 

Neeraj Khaitan

Replies (4)

YES BRO AS SERVICE TAX IS PAID ON CASH BASIS....SO AS SOON AS THE AMOUNT IS RECIEVED,SERVICE PROVIDER BECOMES LIABLE TO PAY SERVICE TAX..........!!!

agree with above answer..

Originally posted by : SANYAM ARORA

YES BRO AS SERVICE TAX IS PAID ON CASH BASIS....SO AS SOON AS THE AMOUNT IS RECIEVED,SERVICE PROVIDER BECOMES LIABLE TO PAY SERVICE TAX..........!!!

BUT WHAT ABOUT THIS NOTIFICATION BELOW:

 

No service tax on advance received- Notification No: 36/2010 dt 28-6-2010

 

 

 

Government of India

Ministry of Finance

(Department of Revenue)

New Delhi, the 28th June, 2010

Notification No. 36/2010 - Service Tax

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance

Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), the Central Government, on being

satisfied that it is necessary in the public interest so to do, hereby exempts the taxable services specified

in clause (A) of section 76 of the Finance Act, 2010 (14 of 2010) other than services referred to in clause

(zzc) and (zzzz) of sub-section (105) of section 65 of the Finance Act from so much of the service tax

leviable thereon under section 66 of the Finance Act as is in excess of the service tax calculated on a

value which is equivalent to the amount of advance payment received before the said appointed date.

Explanation.- For the purpose of this notification,

(i) “appointed date” means the 1st day of July, 2010;

(ii) “advance payment” means consideration received for the said taxable services to be

provided.

2. This notification shall come into force on the date of its publication in the Official Gazette.

 

[F. No. 334/3/2010 -TRU]

(K.S.V.V.Prasad)

Under Secretary to the Government of India

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