With respect to raising invoices to the Clients, the Point of Taxation Rules, 2011 have to be considered to determine the correct rate to be levied from 12.36 percent to 14 percent

This is to bring to your notice that the recent change made by the Ministry of Finance vide Notification No. 14/2015 ST dated 19^th May, 2015 so as to increase the leviable rate of service tax from 12.36 percent to 14 percent, being effective from 1^st June, 2015.

 

With respect to raising invoices to the Clients, the Point of Taxation Rules, 2011 have to be considered to determine the correct rate to be levied. To know whether a service has been provided or agreed to be provided for a consideration and its point of taxation, three main ingredients i.e.:

 

(a) provision of taxable service,

(b) raising of invoice, and

( c) receipt of payment are important.

 

As per Rule 4 of the Point of Taxation Rules, 2011 following should be considered to understand applicable service tax rate:

 

POINT OF TAXATION RULES, 2011
Condition	Applicable Rule	Invoice Issued	Payment Received	Rate
Taxable Service Provided  before rate change	Rule 4(a)(i)	After rate change	After rate change	14%
	Rule 4(a)(ii)	Before rate change	After rate change	12.36%
	Rule 4(a)(iii)	After rate change	Before rate change	12.36%
Taxable Service Provided  after rate change	Rule 4(b)(i)	Before rate change	After rate change	14%
	Rule 4(b)(ii)	Before rate change	Before rate change	12.36%
	Rule 4(b)(iii)	After rate change	Before rate change	14%

 

Please make the changes as per the above mentioned conditions as and when applicable.