Service tax on advance received

CA Prakash Rai (CA) (129 Points)

17 October 2014  

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.