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Dear Sir,
Thank you for your kind reply to my earlier queries.
I have another query with regards to Service Tax and I look forward to your kind advice:
Q:- Any advance payment by whatever name known is received by us to the provision of our services, should be included for calculating the service tax liability.
i.e “Whether the payment of Service Tax is to be made for the billed amount or for the amount received?
I look forward to hearing from you.
Thanking you,
Regds
Rajesh
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Dear Rajesh

We are a market research agency engaged in conducting corporate surveys. We have received advance payments in May 2008 in respect of a project where our work will commence only in August 2008. We would like to know when we would be required to pay service tax on such advance receipts, for services to be provided on a later date.

Service tax is levied on receipt of consideration for taxable services provided or to be provided. Accordingly, service tax becomes due for payment as soon as payments are received, irrespective of the time of actual rendering of services. Even if payments are received in advance for services yet to be provided, service tax becomes payable on the basis of the month of receipt of consideration. Therefore, you would be required to deposit service tax in respect of such advance payments received in May, latest by June 5, 2008. In case of e-payment of service tax, the due date would be June 6, 2008.

Please visit link Service tax is applicable on advance payment to companies - Financial Express

Ramakant
Service tax is a tax levied by the government on service providers on certain service transactions, but is actually borne by the customers. It is categorized under Indirect Tax and came into existence under the Finance Act, 1994.
The taxpayer had failed to pay the service tax on the compensation remitted to the service providers (nonresidents). On assessment of the service tax liability, the taxpayer countered that the service tax would be available for collection as a CENVAT credit under a “revenue neutrality” position.
Liability on reverse charge basis under point of taxation rules of service tax arises at the time of payment of invoice and not at the time of receipt of invoice.
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