Point of taxation

Dear Ashish,

Explanation of Point of Taxation Rules in layman's language:

If service provided before 31st March 2012, there may be two situation with respect to receipt of income as well raising of invoice.

If Invoice is raised before 31st March 2012 but Payment received after 1st April 2012 then Rate of service tax would be 10% otherwise 12% .

In nutshell, Out of three events i.e. Provision of service, Raising of invoice and Receipt any of two events happened before 31st March 2012 then Service tax would be 10% and vice a versa i,.e. 12%.

Hope you would have understood the simplicity of POT rules.

Thanks

Mihir Doshi

I haven't understood the points of both replier.

My question is:

say A is providing services to his clients long before and that service was exempt from tax but on 1-5-2011 notification comes and that service is also subject to service tax. Now in regards to one of his client he has provided service before 1-5-2011 but payment for that service was received on 10-5-2011. Invoice for that is issued on 15-5-2011. Now whether that service which is provided for 10 lakh say be taxed? Reason with the reference of pot rules

The taxable event for the purpose of rate would be when the services are provided or rendered and not in the raising of invoice for making payment.

as per the decission of gujarat high court in the case of CCE v Schott Glass India

Dear Sir.

In this case the date of completion of Service  is 15/03/2001 (prior to 10/05/2011). Service became taxable from 01/05/2011. Payment received on 10/05/2001. Invoice issued on 15/05/2011. The Point of taxation would be 15/03/2011. On the date of point of taxation Service was not taxable so not tax.

Get the opinion of others also.

DILIP DARJI.