Invoice by Service Provider under the Service tax act

Assessee should prepare invoice in respect of his services. The Invoice should be prepared within 14 days from
date of completion of taxable service or receipt of payment towards the value of taxable service, whichever is
earlier.
4.7.1 Details required to be shown in invoice/bill/challan – As per rule 4A(1), the invoice/challan/ Bill should be
signed by authorised person of provider of input services, should be serially numbered and should contain
following details –
(1) Name, address and registration number of person providing taxable service
(2) Name and address of person receiving taxable service
(3) Description, classification and value of taxable service provided or to be provided and
(4) Service tax payable on the taxable service
The rule does not make mention of date, but actually, date should be mentioned.

4.7.2 Education cess and SAH education cess to be shown separately – Education cess and SAH education cess to be shown separately in the Invoice for complying with requirements of Cenvat Credit Rules to facilitate
availment of Cenvat credit by recipient – para 5.1 CBE&C Circular No. 97/8/2007-ST dated 23-8-2007.

4.7.3 Relaxation in case of banking and financial services – In case of banking and financial services provided by
banking company, FI, NBFC or a commercial concern, the invoice/challan need not be serially numbered and
name and address of person receiving taxable service need not be contained on the invoice/challan [proviso to
rule 4A(1) of Service Tax Rules]. This facility is also available to input service distributors of such type of service
providers – para 5.3 of CBE&C Circular No. 97/8/2007-ST dated 23-8-2007.

4.7.4 Invoice in case of continuous service – In some cases, service is provided continuously for successive
periods of time and value of such taxable service is determined or payable periodically. In such cases, the Invoice or challan shall be issued within 14 days from last date of the period [second proviso to rule 4A(1) of Service Tax Rules amended w.e.f. 16-6-2005].
Service like telephones or Annual Maintenance Services are provided on continuous basis. Billing is done
periodically (usually monthly). In such case, invoice should be made within 14 days from close that period.

4.7.5 Invoice at end of billing period – In case of some services like services of commission agent, it is impractical to prepare invoice of commission for each sale. Billing is done at end of the agreed period (say month or quarter), which is termed as ‘Billing Period’. In such cases, it can be argued that such services are provided on
continuous basis and Billing at end of the period should be acceptable.

4.7.6 Rounding up of tax in each invoice not required – Section 37D of Central Excise Act, which is also made
applicable to service tax, requires rounding up of tax. However, this is only while making monthly/quarterly payment to Government. Rounding up of duty in each Invoice is not envisaged in section 37D of Central Excise
Act.

4.7.7 Advance payment from customers – After 13th May 2005, service tax will be payable as soon as advance is
received, even if service is provided later. Thus, service tax is payable when advance is received. Invoice will
have to be prepared.

Leave a Reply