As per law, tax on advance receipt of service charges is to be paid if the invoice is not raised within 14 days from the date of receipt of advance.
Tally.ERP 9 provides you with the facility to record the advances, calculate Service Tax on advances received and to adjust advances while generating sales invoices.
Let us consider an example: You are a consultant and have received advance payment from a client. You may require 8 months to deliver the complete service and therefore a sales invoice will be generated at the end of the project. In this case now you have to generate receipt for advance payment received and need to pay Service Taxon this payment collected. Later, on completion of service generate Service invoice by considering/adjusting the advances received.
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