Service tax on accrual basis?
Querist : Anonymous
Querist : Anonymous
thank You Sir.
Querist : Anonymous
**Service tax on accrual basis / Point of Taxation Rules:**
* Before **1st April 2011**, service tax was generally payable **on receipt of payment** (i.e., when you actually get the money).
* From **1st April 2011 onwards**, due to **Notification No. 18/2011-ST dated 01/03/2011**, service tax liability is triggered **on the earlier of these two events**:
* When **invoice is issued**, or
* When **payment is received**.
This means **service tax is payable on the accrual basis** — i.e., you pay tax as soon as you raise the invoice or receive payment, whichever is earlier.
This rule is part of the **Point of Taxation Rules, 2011**, which specify the timing of when service tax becomes due, to bring uniformity and clarity.
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