Service tax payable on advance received:

As per general rule 3 of the Point of Taxation Rules, 2011, service tax is payable on any advance by whatever name known, received by the service provider towards the provision of taxable service.

Example: A security agency takes a contract to provide security services to a client for the month of October for a consideration of Rs 50,000. It receives an advance of Rs 25,000 from the client in the month of September. In this case, service tax shall be payable by the security agency on the amount of Rs 25,000 received as an advance even though the service has not been provided at that time.