service tax liability against running bill

[Guest]

Dear experts,

Please guide,

Case:- I have received final bill of service work and charged service tax on whole, but service tax on running bill not charged by party earlier, detail as below,

Final Bill	Amount
Total service work amount	200000
Add :-service tax @15%	30000
Total bill	230000
Less:-Running bill amount	-50000
Net value	180000

Kindly guide that service tax is require to pay on running bill amount or not? and if yes, than please what rate of service tax will be applicable of service tax?. (earlier or present)

Regard

Vikram

[Rajagopalan Ranganathan]

Sir,

If Service provider receives advance payment in respect of service to be provided by him then he has to pay the service tax on 5th or 6th of the following month in which the bill is raised. That is if he raises the bill in April he has to pay the service tax on 5th or 6th of May. This rule is applicable to service tax paid under reverse charge mechanism also. If the provider of service pay service tax on ₹ 50000 of running bill he has to pay interest and penalty for late payment.

[Ganeshan Kalyani]

Sir, the service provider is required to raise invoice within 30days from the date of completion of service or when the advance is received. On receipt of advance or raising of invoice the service provider is liable to pay service tax. Since he has not paid tax on advance received he will have to pay interest. Thanks.

AI Summary

Service tax on advances requires payment when advance is received or invoice raised, with interest for late payment. The service provider is liable to pay service tax upon receipt of an advance or on raising an invoice, with payment due in the month following receipt/raising; this obligation includes supplies under the reverse charge mechanism. Failure to discharge tax on a running bill attracts interest and penalties, and invoicing within thirty days of completion or receipt of advance is required; belated payment does not eliminate the earlier tax liability.