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TMI BlogLiability for payment of tax against advance billing-regX X X X Extracts X X X X X X X X Extracts X X X X ..... Sir, I would like to have the clarify on the following in respect of service tax liability: 1. Invoice towards advance payment of 5% of the contract value raised prior to March 2012 but still the payment for the same not received from the Customer? My question is here, a) Are we liable for payment of Service tax on the same month when we raised the invoice?. or When the service tax beco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mes payable on billing or Realisation of amount from Customer? b) Since the customer not willing the release the service tax payment as asking us to produce the documentary evidence for having the paid the tax to the dept?. Is it correct?. c) Is it legally customer is correct to ask the documentary evidence for having paid the tax? 2. When we engage subcontractors ( Partnership firm ) for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... execution of works contract, the service tax has to be shown in their bill 100% of tax amount or only 50% of tax amount as the contractee is liable for remittance of Service tax ( 50% of tax ) under Reverse Charge Mechanism? Kinldy clarify Regards N.Balachandran - Reply By Pradeep Khatri - The Reply = You would have to pay the servcie tax on advance payments received by you. - Reply By N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Balachandran - The Reply = thanks for ur clarification. My question is here. The bill was raised before march 2012 but still No payment was received. When the tax liability will arises? Based on Billing or Based payment received? Regards N.Balachandran - Reply By JAMES PG - The Reply = As per the Rule 3 of Point of Taxation Rules , point of taxation shall be the time when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Invoice for the service provided or to be provided is issued.Since advance is received for a service to be provided, Service Tax shall be remitted within the due dates prescribed irrespective of the receipt of payment - Reply By Seetharaman K C - The Reply = Rule 3 of Point of Taxation Rules specifies as under 3. Determination of point of taxation.- For the purposes of these rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, unless otherwise provided, point of taxation shall be,- (a) the time when the invoice for the service provided or to be provided is issued: 2 [Provided that where the invoice is not issued within the time period specified in rule 4 A of the Service Tax Rules,1994 , the point of taxation shall be the date of completion of provision of the service.] (b) in a case, where th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e person providing the service, receives a payment before the time specified in clause (a), the time, when he receives such payment, to the extent of such payment. The issue which has been asked by you actually falls under clause (a) so service tax is liable to be paid when the invoice is issued and as the month is March the payment has to be made by end of March.From your question it seems the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment has not been received however in this case it does not matter as you have already raised the invoice. If you have already raised the invoice and specified service tax in it that is sufficient proof for the service receiver to take CENVAT. However please ensure that you deposit the amount of service tax with interest @ 18% till the date of payment . Regarding your query on Works Contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, the service provider should be paying service tax only 50% of the contract value and he should be showing only the amount of service tax which he pays in his invoice. - Reply By onkar kumar - The Reply = what about the question raised " Is it legally customer correct to ask the documentary evidence for having paid the tax?" - Reply By Pradeep Khatri - The Reply = The answer is 'No'. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince Rule 9(3) of CENVAT credit Rules , has been strucked off. You may also refer the article written by Mr. James PG. Link is being provided as appended below: - Reply By vijay kumar - The Reply = 1(a). Yes, you are liable to pay service tax by 31.3.2012 in terms of Rule 3 of PTR, 2011 irrespective of whether or not your customer has made the payment. 1(b) (c). No. Customer has no le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gal right to seek documentary evidence, as far as service tax provisions are concerned. However, to provide the same or not depends on the relation between you. 2. Partial reverse charge under Works contract service in terms of Nofn.30/2012-ST applies only when the service provider is an individual, HUF or a partnership firm and the receiver is a body corporate. You have not mentioned the stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us of your company as a receiver. Anyway, if the said condition is satisfied, the contractee has to show the gross taxable amount, the service tax payable thereon and the 50% tax payable by him in terms of the said nofn, in terms of Rule 4A of STR, 1994 . The rest 50% is liable to be paid by you in accordance with the month of payment, if the same is paid within 6 months from the date of invoic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ( rule 7 of of PTR, 2011 refers) - Liability for payment of tax against advance billing-reg - Query Started By: - N Balachandran Dated:- 22-10-2012 Service Tax - Got 7 Replies - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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