We are a proprietory concern registered as dealer. Hence, Liability to pay service tax on service provided by Goods Transportation Agency falls on us as per new service tax rules.
Now, I am wondering whether liability to pay service tax ariases on the date when we receipt service and bill for the service or when we make the payment to the transporter?
Seeking clarification. If possible, please notification number also.
Thanks,
Tushar Parmar.
| Originally posted by : Tushar | ||
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Dear Mr. Tushar
Payment of tax in cases of new services.- Where a service, not being a service covered by rule 6, is taxed for the first time, then, –
(a) no tax shall be payable to the extent the invoice has been issued and the payment received against such invoice before such service became taxable;
(b) no tax shall be payable if the payment has been received before the service becomes taxable and invoice has been issued within the period referred to in rule 4A of the Service Tax Rules, 1994. |
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Liability Arises When we do Receive the Service.
As per Rule 7 Point of taxation Rules, 2011, on payment basis; provided you make the payment to that bill in 6 months, else, it would be on invoice basis.
liability arise wen you receive the service or u receive the payment whichever is earlier
Agreed with Mr. Vikas
Correct your answer Akanksha...
Fully agree with Mr. Vikas.
Under Reverse Charge Mechanism, (Notfication No. 30/2012 ST) where liability to pay tax is of the Service Receiver (whether full or partial), Rule 7 is applicable, which has overriding effect over all other rules of POTR (for service receiver). As per Rule 7, the tax liability arises only after payment is made to the service provider except when payment is not made within 6 months of date of invoice, POT is such date of invoice.
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