20 February 2016
Under Point of Taxation Rules the liability for service tax (excluding tax payable under Reverse Charge Mechanism) is on the happening of one of the three following events: (a) Completion of the Service Rendered. (b) Issue of Tax Invoice - if the invoice is issued within 30 days of completion of service, the date of invoice will be treated as date of service rendered, - else it will be the date of completion of service rendered. (c) Receipt of the consideration in cash or otherwise. - whichever is earliest.
Therefore the Service Tax Liability arises on the issue of invoice (subject to (b) above) irrespective of whether the amount is received or not.
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