𝗖𝗘𝗦𝗧𝗔𝗧 𝗕𝗮𝗻𝗴𝗮𝗹𝗼𝗿𝗲 𝗥𝘂𝗹𝗶𝗻𝗴 𝗼𝗻 𝗦𝗲𝗿𝘃𝗶𝗰𝗲 𝗧𝗮𝘅 𝗼𝗻 𝗠𝗼𝗯𝗶𝗹𝗶𝘇𝗮𝘁𝗶𝗼𝗻 𝗔𝗱𝘃𝗮𝗻𝗰𝗲𝘀 📢 The Tribunal held: "Mobilization advances secured by guarantees are treated as loans and become taxable upon invoice issuance, not at receipt."

🔍 𝗙𝗮𝗰𝘁𝘀: 𝗖𝗼𝗺𝗽𝗮𝗻𝘆: Shankaranarayana Constructions Private Limited 𝗜𝘀𝘀𝘂𝗲: Is Service Tax due upon receipt of mobilization advances, or only when invoiced? 𝗔𝗰𝘁𝗶𝘃𝗶𝘁𝘆: Provided construction services and received mobilization advances secured by bank and personal guarantees.

⚖️ 𝗝𝘂𝗱𝗴𝗲𝗺𝗲𝗻𝘁: The Tribunal ruled that mobilization advances, treated as loans secured by guarantees, are not liable for Service Tax until invoicing. Under the Point of Taxation Rules, tax liability is triggered upon service completion and invoicing, not at the advance stage. The appeal was allowed, removing the interest demand.

𝗖𝗮𝘀𝗲 𝗜𝗻𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻: 𝗧𝗶𝘁𝗹𝗲: Shankaranarayana Constructions Private Limited vs. The Commissioner of Central Tax, Bangalore East Commissionerate 𝗦𝗲𝗿𝘃𝗶𝗰𝗲 𝗧𝗮𝘅 𝗔𝗽𝗽𝗲𝗮𝗹 𝗡𝗼. 20091 of 2023 𝗢𝗿𝗱𝗲𝗿 𝗗𝗮𝘁𝗲: 13 October 2023 📜 This ruling clarifies that mobilization advances, secured and treated as loans, are only taxable upon service completion and invoicing, eliminating early tax liability.