Please Explain me the Detailed accounting Entries For The Following Transaction, when Service Tax is payble on Receipt & Payment Basis
1) Advance paid to Service Provider. He will raise bill on us after providing services ( may be after one month)
2) Advance Received From Customer. we will raise bill on customer after providing services ( may be after one month)
1ST CASE: WHEN THE ADVANCE IS PAID SERVICE TAX IS NOT APPLICABLE, i.e,WHEN THE SERVICE IS RENDERED THEN SERVICE TAX WILL APPLY . THE SAME WILL APPLY IN 2ND CASE
AS PER CENVAT CREDIT RULES 2004 NO SERVICE TAX IS PAYABLE ON ADVANCE PAID TO SUPPLIER.
ENTRY FOR SERVICE TAX WILL BE MADE WHEN BILL IS RAISED. BUT THE INPUT CREDIT OF SERVICE TAX WILL BE AVAILABLE WHEN PAYMENT IS MADE. AS IN YOUR CASE PAYMENT IS ALREADY BEEN MADE, THE INPUT WILL BE AVAILABLE WHEN BILL IS RAISED.
Dear Sir,
I have raised invoice but i am not recieved money against invoice. so, i paid to the service tax or not
CAclubindia
