Service tax

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This query is : Resolved

S K RAWOOL (Querist)

21 May 2015 One of our client to whom Rule 6 is applicable i.e Rs 50 lakh exemption to whom service tax can be payable on receipt basis.So if the service is provided by him before change of tax rate(before 1.6.2015) and bill done @ 12.36% so at what rate payment should be received?i.e 12.36% or 14%.
Please reply.

Sagar mal Pareek

Sagar mal Pareek (Expert)

21 May 2015 Pl.refer point of taxation rules,2011,as amended from time to time for yt query ,as it provides for all circumstances ,when the payment of service tax becomes due ,more particularly if the invoice is raised and service is completed before change in service tax ratye vis a vis the Receipt of payment ,in the specified case as stated by u in the query.tks sagar mal pareek,Bharuch(Gujarat)9824346469,smpfca@gmail.com

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)

21 May 2015 Switch over to new rates.
To simplify:-

Rule 4 of Point of Taxation Rules change in effective rate of Service Tax:

There are three events that occur in connection with a service

A. Issue of Invoice
B.Payment received
C. Provision of Service

If any two out of the three events have occurred on/before 31st May, the old rate of 12.36% shall be applicable.

If any two out of the three events have occurred on/after 1st June, the new rate of 14% shall be applicable.

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