22 August 2013
As per contracts mobilisation advance was to be paid to contractor and same was to be recoverd from the bills @10%. Ther Service Tax was to be reimbursed to contractor as per actual and submission of service tax receipt chalan.
The contractor had requested for mobilisation advance after 5 months from the start of work. Till date contractor had raised 5 bills and bill was psssed. From 1st bill to 5th bill , service tax was calculated on the gross amount of bill and same was reimbursed to Contractor on submission of Service Tax challan.
The contractor had requested for mobilisation advance after 6 months in 6th bill and same was paid to contractor after deducting TDS only. Further in 7th Bill, department has deducted mobilisation advance @10% of this bill and allreay paid paid amount in 1 to 6 bill.
The cotractor has now submitted the service tax challan of mobilisation advance and requested for reimbursement. Please provide your view in this regard
08 September 2013
Service tax is payable only when you render the services. Till you complete the contract and submit the running you cannot charge service tax and on mobilisation advance no service tax is applicable as you will be charging in your bills. Kindly note that onmobilisation advance TDS is applicable.
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