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Service tax on advance received

Queries 589 views 1 replies

As per Service Tax Rules invoice is to be prepared if an advance amount is recived even if services have not yet been provided. If in case the contract is later cancelled and advance is forfeited, would service tax be applicable on such advance collected?
(Situation 1: Service tax was collected on that invoice
Situation 2 : Service tax was not collected in that invoice)
Thanks in advance.

Replies (1)

Yes, whether service tax is charged on invoice or not, service tax is payable on receipt of advance for providing or agreeing to provide any taxable service.


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