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Point of Taxation - Illustration


CA PRAMOD SARAOGI 
posted on 14 March 2011



Determination of Point of Taxation in accordance with Rule 3 of the Point of  Taxation of Rules , 2011

 

 

 

 

 

 

 

 

 

Date of Providing Service

Date of Invoice

Date of Payment

Status of Service

Point of Taxation under Rule 3

Remarks

01/06/2011

01/05/2011

(STP)

01/04/2011

STP

01/04/2011

Earliest of the three dates

Point at which service will be deemed to be provided as per Rule 2(e) of Point of Taxation of Rules , 2011

 

15/05/2011

STP

01/05/2011

15/07/2011

SP

01/05/2011

01/07/2011

(SP)

01/04/2011

STP

01/04/2011

15/06/2011

SP

01/06/2011

15/07/2011

SP

01/06/2011

 

*STP = Service to be provided

*SP = Service Provided

 

Rule 3 says that the Point of Taxation shall be earlier of the following :

 

(i)    Provision of Service

(ii)   Issue of Invoice

(iii) Receipt of Payment

 

Determination of Point of Taxation in accordance with Rule 4 of the Point of Taxation of Rules , 2011 IN CASE OF CHANGE OF RATE OF TAX AFTER THE DATE OF PROVIDING SERVICE

 

Date of Providing Service

Date of Invoice

Date of Payment

Date of change of Rate of Tax

Case

Basis of Point of Taxation under Rule 4

Point of Taxation under Rule 4

Point of Taxation under Rule 3

01/06/2011

01/05/2011

(STP)

01/04/2011

10/06/2011

N.A.

As per Rule 3

01/04/2011

01/04/2011

15/05/2011

10/06/2011

N.A.

As per Rule 3

01/05/2011

01/05/2011

15/07/2011

10/06/2011

Case II

Date of Issue of Invoice

01/05/2011

01/05/2011

01/07/2011

(SP)

01/04/2011

10/06/2011

Case III

Date of Payment

01/04/2011

01/04/2011

15/06/2011

10/06/2011

Case I

Date of Payment or Issue of Invoice whichever is earlier

15/06/2011

01/06/2011

15/07/2011

10/06/2011

Case I

Date of Payment or Issue of Invoice whichever is earlier

01/07/2011

01/06/2011

 

Taxable Service provided before the date of change of rate :

 

Case

Date of Invoice

Date of Payment

Point of Taxation Under Rule 4

I

After the date of change of rate

After the date of change of rate

Date of Payment or Issue of Invoice whichever is earlier

II

Prior to Date of Change of Rate

After the date of change of rate

Date of Issue of Invoice

III

After the date of change of rate

Prior to Date of Change of Rate

Date of Payment

 

 

Determination of Point of Taxation in accordance with Rule 4 of the Point of Taxation of Rules , 2011 IN CASE OF CHANGE OF RATE OF TAX BEFORE THE DATE OF PROVIDING SERVICE

 

Date of Providing Service

Date of Invoice

Date of Payment

Date of change of Rate of Tax

Case

Basis of Point of Taxation under Rule 4

Point of Taxation under Rule 4

Point of Taxation under Rule 3

01/06/2011

01/05/2011

(STP)

01/04/2011

20/07/2011

Case II

Date of Payment or Issue of Invoice whichever is earlier

01/04/2011

01/04/2011

15/05/2011

20/07/2011

Case II

Date of Payment or Issue of Invoice whichever is earlier

01/05/2011

01/05/2011

15/07/2011

20/07/2011

Case I

Date of Payment

15/07/2011

01/05/2011

01/07/2011

(SP)

01/04/2011

20/07/2011

Case III

Date of Issue of Invoice

01/07/2011

01/04/2011

15/06/2011

20/07/2011

N.A.

As per Rule 3

01/06/2011

01/06/2011

15/07/2011

20/07/2011

N.A.

As per Rule 3

01/06/2011

01/06/2011

 

Taxable Service provided after the date of change of rate :

 

Case

Date of Invoice

Date of Payment

Point of Taxation Under Rule 4

I

Prior to Date of Change of Rate

After the date of change of rate

Date of Payment

II

Prior to Date of Change of Rate

Prior to Date of Change of Rate

Date of Payment or Issue of Invoice whichever is earlier

III

After the date of change of rate

Prior to Date of Change of Rate

Date of Issue of Invoice

 

From the above illustration, it is very much obvious that there is a contradiction in determination of Point of Tax under Rule 3 and Rule 4. Both these rules suggest different point of tax on different occasions or events when change in the rate of tax takes place at three different points of time  viz. Date of Provision of Service,  Date of Payment  or Date of Issue of Invoice.


Published in Service Tax
Source : Budget 2011
Views : 11659

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