Reverse charge

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This query is : Resolved

sivabommakanti (Querist)

29 June 2013 Should reverse charge be paid on service received before July 12 and bill is dated before July 12 and but paid after July 12 by the service receiver for car hire charges.??? If tax is not applicable what about rule 7 which says that POT is on date of payment if made within 6 months.

Ganeshbabu K

Ganeshbabu K (Expert)

29 June 2013 No reverse charge, if service provided prior to 1-7-2012

1)In case of some services, reverse charge mechanism is applicable w.e.f. 1-7-2012 i.e. service tax is payable (partly or wholly) by service receiver..

2)In view of section 67A (which is effective from 28-5-2012), service tax will not be payable by service receiver under reverse charge mechanism, if service was provided prior to 1-7-2012, even if payment is received later.

3)This will be so even if invoice was issued after 1st July 2012. However, to avoid controversy, it is advisable to date invoice prior to 30-6-2012

4)Please Note that Point of Taxation Rules cannot override provisions of section 67A

Thanks & regards
Ganesh babu k

sivabommakanti

sivabommakanti (Querist)

29 June 2013 Then when is POT Rule 7 saying that for Reverse charge, payment date is the POT if paid within 6 months applicable????? Please explain.

Ganeshbabu K

Ganeshbabu K (Expert)

29 June 2013 service for the period after 1st july 2013,,

bill raised but payment not made

suppose

bill raised 07-08-2012 but payment not made to party till date

so as per this we need to pay service tax with interest from 07-08-2012...

Thanks & regards
Ganesh babu k

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