I have client who has paid service tax on advance amount received (assume in Oct-march 2013 return). Now,in current period i.e.April-Sept 2013,he has raised bill for the same. So,where to show such amount, which is paid earlier.
27 October 2013
Theoretically the experts answer is correct, but in the commercial world practice is different. Suppose the contract is for Rs.10 lakhs plus service tax - Rs.11,23,600/-. If 100 % advance is received, which is usually in a round figure, say Rs.10,00,000/- would have been received. The ST - 3 would then show that advance received is Rs.8,89,996/- on which Service Tax would come to Rs.1,10,004/- which would equal Rs.10,00,000/-. The invoice including service tax would be Rs.11,23,600/-. Hence in the current period in the month of invoice issued Rs.1,10,004/- should be shown as the service rendered and Rs.13,596/- as service tax payable/paid.
CAclubindia
