Under reverse charge mechanisim

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 July 2015 my company paid as a advance to advocate my question is that whether under reverse charge i have to pay service tax on advance payment or wait to receive bill and then pay service tax.

Ramesh

Ramesh (Expert)
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02 July 2015 Hi!
As per Rule 7 POTR, POT in case of Reverse Charge is the date of payment. Therefore Service tax to the extent of advance payment should be paid.

Rgds,
Ramesh

Querist : Anonymous

Querist : Anonymous (Querist)

02 July 2015 Dear Ramesh Sir.
please solve my problem that whether service receiver have to pay TAX on advance payment made to service provider and which date service tax should be paid under reverse charge.

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Ramesh

Ramesh (Expert)
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03 July 2015 Determination of point of taxation in case of person liable to pay service tax
under reverse charge or in case of associated enterprises - [Rule 7]

This rule determines the point of taxation in case of persons liable to pay service tax under reverse charge and in case of transactions with associated enterprise.

1) POT under reverse charge to be the ‘date of payment to the vendor’
The point of taxation in case where recipient of service is required to pay service tax under reverse charge shall be the date on which payment is made to the vendor for the services provided.

Thus, in your case date of payment is point of taxation and thus liable to pay service tax on advance payment.

Rgds,

Ramesh