Tushar (Service) (159 Points)
07 January 2013We 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.
sathiyadeepan
(Executive)
(147 Points)
Replied 07 January 2013
| 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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Sonu Kumar
(Account Manager)
(665 Points)
Replied 07 January 2013
Liability Arises When we do Receive the Service.
Vikas
(CA)
(1135 Points)
Replied 08 January 2013
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.
Akanksha Jain
(Article)
(690 Points)
Replied 08 January 2013
liability arise wen you receive the service or u receive the payment whichever is earlier
Manoj Agarwal
(Service Tax Consultant Rourkela Service)
(3456 Points)
Replied 11 January 2013
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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