Reverse charge

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Mayanka Agrawal (Querist)
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07 September 2013 company receiving work contract service but they have received services FY 11-12 and make payment on 12-13 bill also raised on 12-13 but after making payment.
so whether reverse charge will be apply or not as it come effective from 1.07.2012

Ganeshbabu K

Ganeshbabu K (Expert)
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07 September 2013 1)No reverse charge, if service provided prior to 1-7-2012

2)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..

3)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.

4)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

[Note that Point of Taxation Rules cannot override provisions of section 67A].

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