Our company have some advance from a customer for payment to third parties on behalf of the client for custom clearance job.
Later on cost of third party payment got reduced sustancially and part of advance remained with us. The client had
told us to retain the advance for next job. The advance is shown in final accounts in clients name.
Later on advanced company merged with some other company and later on it merged again with some other company.
Now 3 years passed; no company came forward to claim the amount. How long we should carry forward advanced amount in our books ?
if right claiment approches, our company intends to refund the advance if not claimed can the company write off the amount ?
If yes how the entries should be passed in books of accounts ? Advance was for third party payment (reimbursedments) hence not against service bill.
But now if written off; will there be service tax liability ? If yes then from which date ?
Kindly advice; thank you so much.
Valerian D'souza
Accounts Manager
CAclubindia
