Validity of invoice

Stat Audit 701 views 2 replies

pratik

CA- Accounts executive

272 Points Joined September 2011

Hello Fellas,

I have a very basic but important query regarding Invoices containg service tax. I want to know whether Invoices should contain Service Tax bifurcation and if client have failed to bifurcate ,what will be the consequences for the same.

Thanks in advance.

Replies (2)

Aakash Shah (Stallions ERP)

Co-founder at Stallions ERP

41 Points Joined November 2013

Hi,

If invoice doesnot have ST bifurcation, then the company (we) cannot take credit of the ST as per ST Rules and so, bifurcation is necessary. Also, if bifurcation is not mentioned on the invoice, it may be termed as if ST is not charged and the amount indicated is soley as compensation for service only and in violation of ST Act and Rules thereunder.

Hope this is usefull.

Aakash Shah.

Rashi Bajaj

752 Points Joined January 2012

Dear Pratik,

It is best to give service tax amount separately in the invoice (also state your ST. No.) so as to facilitate the Recepient of service to claim CENVAT credit(if eligible).

However, if you fail to bifurcate, then you will be liable to calculate service tax by reverse calculation method condiering the invoice value to be inclusive of service tax and pay service tax accordingly.

Hope this helps.