Dear All
Central Government has enhanced the rate of Service Tax Rate from 12.36% to 14% vide Notification 14/2015-ST dated 19th May, 2015. New rate of 14% is effective from 01st June,2015.
Pursuant to the above stated increase, the rate of tax that would be applicable in certain situations, as per the Point of Taxation Rule would be as under:-
|
S. No. |
Taxable Service Provided when -before/after the notified date |
Issue of invoice when -before/after the notified date |
Receipt of payment when -before/after the notified date |
Point of Taxation |
Rate applicable |
|
a) |
before |
after |
after |
date of payment or date of issue of invoice whichever is earlier |
14% |
|
b) |
before |
before |
after |
date of issue of invoice |
12.36% |
|
c) |
before |
after |
before |
date of payment |
12.36% |
|
d) |
after |
before |
after |
date of payment |
14% |
|
e) |
after |
before |
before |
date of issue of invoice date of payment whichever is earlier |
12.36% |
The following transitional issues merit attention:
· In case of situations stated in (c) & (e) above, in accordance with Rule 2A of POT Rules if the payment is not credited in the bank within 4 working days from the notified date, the new rate of 14% would apply.
· In case of situations stated in (d) above, service tax would have already been paid at the old rate (12.36%) when the invoice was issued or payment received before the change of rate of tax applying Rule 3 of POT Rules. However, due to subsequent increase in rate, there would be a short payment which the assessee may have to deposit. However, no interest would apply if the assessee deposits the differential amount within the due date reckoned from the point of taxation.
Hope the information/analysis helps you is assisting you in professional endeavours.
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