Service Tax Advance Payment

[Siraj Shaikh]

Dear Sir,

A advance payment has to be made against the Service to be received towards Maintenance Contract. The Party is asking even for the Payment of Service Tax along with the Advance..... Can such advance be made and the credit be taken ?

 

AI Summary

Service tax on advance payments: tax arises on receipt and input credit is available when properly invoiced and accounted.
Service tax is payable on advance payments for taxable services and the service recipient is entitled to take input tax credit on the service tax charged on that advance, subject to normal credit conditions; compliance requires an invoice evidencing the tax and assurance that the service provider accounts for the tax.