Whether Service Tax is payable on Proforma Invoice

[Narayan Mahale]

Whether under service tax rules, service tax is payable on Proforma Invoice?. Few of the customers, without knowing the requirement under statutory provisions, demand for a proforma invoice, which has no validity under Sales Tax or Service Tax. Proforma being a mere estimate no expenses or assets could be booked under accounts.

Despite this, some of the service receiver ask for Proforma Invoice as a precondition of release of Adhoc or advance payments.

Therefore, whether under service tax read with point of taxation rules, 2011, service tax is payable or not?

No Advance has been received or service has been provided but as per terms of agreement service provider is required to issue a Proforma Issue?

Please clarify this.

AI Summary

Service Tax Not Applicable to Proforma Invoices Under Finance Act 1994; Only Valid for Actual Invoices. A discussion on whether service tax is applicable to proforma invoices highlights that these invoices are not recognized under the Finance Act, 1994, and associated rules. Proforma invoices are typically used as estimates or preconditions for advance payments but lack the validity of actual invoices required for tax purposes. Despite some customers requesting proforma invoices, no service tax is payable on them as they do not constitute a valid document for tax assessment. The consensus among respondents is that service tax applies only to actual invoices, not proforma invoices.