Hi,
The assessee has received the service as well as invoices in or before Mar 12 (when rate of tax was 10% & assesee being comapny reciving the service is liable to pay tax).However, the asessee made the payment in April 2012(when rate has increased to 12%).
As per rule 4, when there is change in rate of tax, the rate would be when service is actullay received. In givrn case, it is Mar12 & rate would be 10%. But the point to be noted here is that Rule 4 overrides only Rule 3, as it clearly starts with the phrase "not withstanding anything cionatained in Rule 3.....".
However Rule7 is applicable to those assesees who are liable to pay tax on reverse charge mechanism(Eg. GTA).& It starts with "Notwithstanding anything contained in these rules..." That means Rule 7 overrides all other rules including rule4. & hence point of taxation would be date of payment & accordingly rate of tax woul be rate prevailing in April ie. 12%
So, dear all, please guide me at what rate of tax shall I dischareg the service tax liability?
Thanks in advance.
Reagrds,
Preeti Mehta
CAclubindia
