Service tax on unpaid invoices

Queries 2392 views 2 replies

SK Gupta

Business

24 Points Joined December 2008

We had raised an invoice to a client way back in October 2010 for services rendered at that time for Rs. 50,000/-. The client never approved our bill disputing the scope services. So, the invoice never went to the client's accounts department and as such was never paid. Now, after a long discussions, the client has approved the payment of Rs. 50,000/- to us. But their accounts is refusing to accept our invoice which is dated October 2010 as the accounts for that year is closed and they never made any payment provisions. They are asking for a fresh invoice of current date. My problem is that we have paid full service tax on the basis of invoice which was raised in October 2010. Pl guide what should we do n this case.

Thanks in anticipation,

SK Gupta

susheelg @ gmail.com

Replies (2)

ramesh

Sr.Executive Accounts

92 Points Joined September 2009

It is the mistake of your client who has not made any provision against services received. Since provision is made not on the basis of invoices but on the basis of work/job done. You have already deposited service tax in P.Y. and St-3 must have been filed by you for the quarter ended Mar-2011. So at this stage you can’t show advance deposit.

Obviously, the expenses have to be booked in current F.Y. by your client and document date is not important but posting date is important for booking expenses.

Hence , to avoid any audit objection that why they have not made any provision in P.Y. against such services received, they are simply asking you to raise invoice in current date.

To resolve the issue , you can reverse the documents and issue a fresh invoice or simply rewrite the current date by way of oblique in their copy.

Thanks