Service Tax Payment Under Reversed mechanism Charge

[Asked by Guest]

Sir,

we have paid service tax under reversed mechanism charge on Legal Service , Man Power Work Contract , Director Sitting Fee etc.

my query is:

if we made any advance payment to any contractor who supply us manpower or we made advance payment to an advocate,

is service tax applicable on advance payment?

if service tax is applicable on advance payment then, when we take CENVAT Credit of  Service Tax Paid amount?

Regards,

Rahul Patel

AI Summary

Service tax on advance payments under reverse charge must be paid by the recipient; credit follows service completion or invoice issuance.
Advance payments to service providers are taxable and attract liability under the reverse charge mechanism because payment receipt constitutes a point of taxation; the recipient must pay service tax on advances, and may avail CENVAT credit of tax paid on advances after completion of services or upon issuance of the invoice, with taxable amounts for manpower services computed proportionately between advance and final invoice.