There has been a major change in Service tax rules for point of taxation, earlier ST was payable on payment basis now the same has been changed to billing basis from 1.07.2011 onward the notice states as follows( notice no- 25/2011 dated: 31st March,20011) :-
Point of Taxation shall be ( earlier of ) :-
a) date on which invoice for the service provided/ to be provided is issued, or
b) where the invoice is not issued within 14 days of service completion than the date of completion shall be considered for Point of taxation. or
c)in case of advance payment ( by whatever name) than the point of taxation shall be date of receipt of such advance.
With this the Service tax payment liability stands changed from payment basis to billing.
The transitional provisions being simple, the above shall not apply in the case where the provision of service is completed; or where invoices are issued prior to the date on which these rules come into force i.e 01/07/2011. and in such case the point of taxation shall be at the option of the taxpayer be it the date on which billing is made or on which payment is received.
I had attached the notice issued by the department for your reference which also lists out exemption from payment on billing basis, which also includes the service rendered by a CA..
Published in Service Tax
Source : Notification no- 25/2011 dated 31st march,2011
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