Please help me out with the following query.
Our client is remitting service tax on all open payments on exclusive basis. i.e. Invoice amount is Rs. 10 lakhs (Invoice raised on 01/01/2011) and the amount received is Rs. 2 lakhs (on 31/01/2011) as a part payment the client remits service tax of Rs. 20,600/- (2 lakhs * 10.30%). Is this practice correct? As per service tax rules what is the rule? whether service tax is to be calculated on inclusive basis or exclusive basis in case of part payments? An early reply is highly appreciated. Thanks in advance.
CAclubindia
