As rate of Service Tax has increased to 12.36% from existing rate of service tax 10.30% from 01.04.2012 so here I am sharing the point of taxation (POT) in such circumstances which must be considered by assessee while issuing invoice.
Service was provided before change of effective rate or
Service was provided after change of effective rate
Service was provided before change of effective rate: In case taxable service was provided before change of rate i.e. there is change in rate of service tax after completion of services the POT shall be determined as follows:
1) Both Invoice and payment receipt after change of effective rate: In such case POT shall be date of receipt of payment or issue of invoice whichever is earlier [Rule 4(a) (i) of POT rules, 2011].
2) Invoice prior to change in effective rate but payment receipt after change in effective rate: POT shall be date of issuance of invoice [Rule 4(a) (ii) of POT rules, 2011].
3) Payment receipt before change in effective rate but invoice issued later: POT shall be date of receipt of payment [Rule 4(a) (iii) of POT rules, 2011].
Explanation in Tabular form
| Date of Completion of Services | Invoice Date | Payment receipt Date | Rate of Tax as on date (POT) |
| 31/03/2012 | 10/04/2012 | 11/04/2012 | 10/04/2012 |
| 31/03/2012 | 31/03/2012 | 11/04/2012 | 31/03/2012 |
| 31/03/2012 | 31/03/2012 | 10/04/2012 | 31/03/2012 |
Service was provided after change of effective rate: In case taxable service was provided after change in effective rate of service tax POT shall be determined as follows:
1. Invoice prior to change but payment received after change in effective rate: In such case POT shall be date of payment. [Rule 4(b) (i) of POT rules, 2011].
2. Invoice and payment receipt both prior to change in effective rate: In such case POT shall be date of receipt of payment or issue of invoice whichever is earlier [Rule 4(b) (ii) of POT rules, 2011].
3. Invoice after change in effective rate but payment receipt prior to change in effective rate: POT shall be date of issue of invoice [Rule 4(b) (iii) of POT rules, 2011].
Explanation in Tabular form
| Date of Completion of Services | Invoice Date | Payment receipt Date | Rate of Tax as on date (POT) |
| 10/04/2012 | 31/03/2012 | 20/04/2012 | 20/04/2012 |
| 10/04/2012 | 31/03/2012 | 27/03/2012 | 27/03/2012 |
| 10/04/2012 | 20/04/2012 | 31/03/2012 | 20/04/2012 |
By Naveen Chand Khulve
Email id: khulvenaveen@gmail.com
CAclubindia
