Service tax will be payable on higher rate (i.e. 12.36% instead of 10.30%) if invoices are not raised before 31.03.12.
Example, If the service provided by Labour contractor in month of Mar-12 and raised the invoice in 7th April 12 and received the payment in 10th Aprl-12, then the New rate of Service tax @12.36% will be applicable, old rate of Service tax @10.30% applicable only in the situation when both the date of issuance of invoice as well as the date of payment is prior to the date of change in rate.
Please refer the Rule 4(a)(i) of Point of Taxation Rules, 2011
Example, If the service provided by Labour contractor in month of Mar-12 and raised the invoice in 7th April 12 and received the payment in 10th Aprl-12, then the New rate of Service tax @12.36% will be applicable, old rate of Service tax @10.30% applicable only in the situation when both the date of issuance of invoice as well as the date of payment is prior to the date of change in rate.
Please refer the Rule 4(a)(i) of Point of Taxation Rules, 2011
Invoice and payment receipt after change of effective rate - If invoice is issued and payment is received after change in effective rate of tax, point of taxation will be date of receipt of payment or issue of invoice, whichever is earlier
[Rule 4(a)(i) of Point of Taxation Rules, 2011] [Really incorrect since
service was already provided prior to change. In any case, assessee has
to ensure that he issues invoice before the change in rate becomes
effective]
By VIJAY CHITTE
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