Understanding Credit Distribution Services for Advance Service Tax Payments

Each month, before you pay tax amounts due, you can offset your liabilities with credits. For example, if you made an advance service tax payment, you can use that credit amount to offset amounts due for service tax, education cess, and higher education cess.

You use the Credit Distribution Services program to apply advance service tax payments to liabilities. The Services tab on the Service Payments form includes:

• Rows for service tax, education cess, and higher education cess

• Columns for the actual balance, available balance, credit utilized, and advanced service tax utilized for each of the tax types

• A field for the available advance service tax

You use the amount in the Available Advance Service Tax field to offset the liabilities for the service tax, education cess, and higher education cess. As you enter amounts in the Advanced Service Tax Utilized column for the tax types, the values in other fields change to reflect the amount of the advance service tax that you apply to the taxes. The value in the Net Amount To be Paid field in the header of the form also changes as you apply the advanced service tax payment to the taxes. After you offset the liabilities with the advance payment amount, you click OK to create a voucher for the amount in the Net Amount To be Paid field.