Applicability of service tax on advances or deposits received from the prospective buyers of complexes from the contractors cum owner- Whether advance or deposits, Service Tax

[samiuddin ansari]

Applicability of service tax on advances or deposits received from the prospective buyers of complexes from the contractor cum owner- Whether advance or deposits received from the buyers are to be included in the taxable value?

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[KASTURI SETHI]

Advances are to be included in the taxable value only when these are to be adjusted against taxable service to be provided in piece meal. Suppose you take advance and your point of taxation is the date of taking advance and you pay ST but later on you are not in a position to provide service against that amount of advance on which ST has been paid. You can claim refund from the department.

The point is advance forms part of taxable value only if taxable service is to be provided otherwise not.