15 July 2012
DEAR ALL, I WOULD LIKE TO ASK THAT, WHEN WE ARE LIABILE TO PAY SERVICE TAX ON REVERSE CHARGE BASIS, WHETHER AFTER PAYMENT OF BILL OF SERVICE PROVIDER, OR RECEIPT OF INVOICE OF SERVICE PROVIDER?
FOR EXAMPLE IF WE AS A LIMITED COMPANY, RECEIVE SOME SERVICES FROM INDIVIDUAL ADVOCATE AFTER 1ST JULY 2012, WHEN WE ARE SUPPOSED TO PAY SERVICE TAX UNDER REVERSE CHARGE, SHOULD WE PAY ON DUE BASIS AS SOON AS WE RECEIVE ADVOCATE'S INVOICE OR WE SHOULD PAY AFTER PAYMENT OF THAT ADVOCATE INVOICE?
15 July 2012
As per Rule 7 of Point of Taxtion Rules, 2011, the POT in respect of persons required to pay service tax as receipients of service, shall be the date on which payment is made. However in case payment is not made within six months of date of invoice, the POT shall be determined as if rule 7 does not exist. In that case it will be under Rule 3(a)- the date of invoice, if issued within time specified in Rule 4A of Service Tax Rules,1994 or otherwise the date of provision of service.
15 July 2012
Under the reverse charge mechanism, the payment should be made in a separate challan and the same can be used as a document for availing the cenvat benefit for other services. In my opinion, pay the advocate fees and remit service tax afterwards.
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