Please advice in detail about the rule, invoiceing and accouting entry for advance received under a contract for taxable service.
For example
Total Contract Value is 10 Lac and payment term is 10% advance with order, 20% after First & Second Stage, and rest 50% after complition of sevice.
'point of taxation' shall be,-
(a) the time when the invoice for the service provided or agreed to be provided is issued:
Provided that where the invoice is not issued within the time period specified in rule 4A of the Service Tax Rules, 1994, the point of taxation shall be date of such completion of provision of the service.
(b) in a case, where the person providing the service, receives a payment before the time specified in clause (a), the time, when he receives such payment, to the extent of such payment.
So as per rules,
service trax shall be paid on the part of payment received at the time of such receipt.
Invoice shall be issued for the part payment.
Accounting to be done as per invoice issued.
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