Ad free CAclubindia and daily updates on your mobile. Subscribe Now!

Service tax on adhoc bill booking

Subhash (Manager F & A) (38 Points)

23 June 2016

Dear Sir, Under original works contract the Service tax is charged to the client @ 15% of 40% of value of work done. The same is received along with the payment of bill raised. In case of adhoc and advance payments, how is the liability of service tax, if any, calculated and how is this to be claimed from the client ? Further if adhoc bills are booked by the client on contractors accoun tat the end of the year against WIP, what is the ST liability and how is the same claimed from client ? Please clarify in detail. Best Regards Subhash

Read more at: /forum/st-on-adhoc-and-advance-payments-362671.asp

Reply
Follow
Share

2 Replies

mohammad rasool baig (Management Consultant) (1026 Points)
Replied 23 June 2016

Subash

We need to calculate the service tax & make payment of service tax for all the invoices or advance payments received from the clients for the concerned period.

So while you are receiving the advance amount, you need to collect along with service tax. If not possible, then you need consider the advance amount as inclusive of service tax then needs to make payment.