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Urgent-service tax credit on advance payment

CA Mukesh Goyal (Assistant Manager) (143 Points)

25 October 2013

I have made an advance payment to input service provider. No invoice/bill issued by service provider regarding advance payment. Invoice/bill for the service will be issued by service provider after providing of service.

Can I claim service tax credit on such payment?

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6 Replies

CA Mukesh Goyal (Assistant Manager) (143 Points)
Replied 25 October 2013

Please any one answered the above query it's urgent

Manoj Agarwal (Service Tax Consultant Rourkela Service) (3456 Points)
Replied 29 October 2013

No, Cenvat cannot be availed without invoice/bill/ challan. Kindly ask the service provider to issue bill within 30 days of receipt of payment under Rule 4A of STR, 1994 (irrespective of actual provision of service).

CA Mukesh Goyal (Assistant Manager) (143 Points)
Replied 30 October 2013

Thanks a lot sir

Can i take service tax credit on the basis of performa invoice issued by the service provider?

Manoj Agarwal (Service Tax Consultant Rourkela Service) (3456 Points)
Replied 30 October 2013

No, proforma invoice is not a valid document under Rule 9 of CCR, 2004 for availing Cenvat Credit.

CA Mukesh Goyal (Assistant Manager) (143 Points)
Replied 31 October 2013

Thanks for the reply sir,

Suppose service is provided in future but service provider issued invoice with full value today and mention service tax on invoice on full value. On the invoice it is mentioned that 50% amount is payable as advance and balance after providing of service (Service receiver paid 50% amount as advance with service tax on that 50% amount).

1. In that case whether service receiver is entitled to claim full cenvat credit i.e. 100% or only 50% because he had paid only 50% service tax.

2. How much amount service provider is liable to deposit regarding service tax whether 50% or total service tax (he has only received 50% amount of service tax from service receiver.