03 March 2009
W.E.F 23 May 2005 service tax is paybale on advance received for providing the service. ours is a post production facility house and it will take 5-6 months to complete a job. During the progress of the work we will receive part payments from the customer and we are paying service tax on the amounts recieved in the same month. w.e.f 24.2.09 the tax rate has been reduced to 10%. For the projects which have started before 24th Feb and completed after 24 Feb 09 we will raise the bills now and have to charge 10% tax. But on the advances received for the same project we paid tax at 12%. Please clarify me how we can raise the bills and pay the tax
03 March 2009
Your case will be treasted as excess collection of Service Tax. As per Section 73A of Service Tax, any excess collection has to be deposited to the credit of Central Government.
03 March 2009
Dear Lokesh Kasat, We have not collected tax on advance received nor issued any part bills to the customer. We paid the tax by applying the formula Amount/112.36*12.36
CAclubindia
