Major change in Service Tax - Notification 18/2011

Hey Kunal this is an amazing notification.................

Truly it is pathbreaking...........

it will change the concept of Service Tax!!!!!!!!!!!!!!!!!!!!

Thank u

hey kunal..!

its realy gud one..thanx for updating for such a gud topics..

thanks for updation mr. kunal please keep sharing in this portal..............

This rule was introduced last year but was not made applicable , this year in fianacila budget Finance minister has made it go through and thus trying to make a parity with GST.

THis is a drastic change and for service sector industries there is change in business scenerio.

Can any body tell me

1) what will be the implication on the invoices which are standing issued as on 1st April 2011 i.e for companies showing amount as DEBTOR  as on 31st March 2011 against service provided or partially provided.??

2) what will be happen when a comapny issues invoice of Rs 100/-  and subsequently is only able to realize Rs 80/- aginst that buttotal service was provided i.e say Rs 20/- became bad debt.????

hey pls let me know that will this change be applicable also for may-2011 pce exams?

Notification are applicable with immediate effect from the date mentioned thereon.....and always remember any updated information if you have on the question being asked in examination will give you an edge over other....even though it is not applicable but you have the updated information u must highlight it in examination..it will help you in securing high marks..

Tankx for Sharing..................

for ur examz...nly notifications bfr 6 mnths applicable !!! but oviusly bettr 2 have a read !!!
N ritesh...no clarity on those issues as yet fr me...vll get bac if have ne otr info!!!

Originally posted by : Ritesh Jain
	This rule was introduced last year but was not made applicable , this year in fianacila budget Finance minister has made it go through and thus trying to make a parity with GST.   THis is a drastic change and for service sector industries there is change in business scenerio. Can any body tell me 1) what will be the implication on the invoices which are standing issued as on 1st April 2011 i.e for companies showing amount as DEBTOR  as on 31st March 2011 against service provided or partially provided.?? 2) what will be happen when a comapny issues invoice of Rs 100/-  and subsequently is only able to realize Rs 80/- aginst that buttotal service was provided i.e say Rs 20/- became bad debt.????

Invoices issued before 01.04.2011 will be treated as per old rules that on the basis of payment received. As point of taxation rules are made applicable from 01.04.2011.

Further, second issue is highly disputed and the same is not discussed by the government or is not taken into consideration while drafting these rules. This is very common problem and is required to be solved. In this case service tax will be charged on whole amount of invoice i.e on rs. 100 or the amount of service tax which being paid on amount of bad-debt may be refunded or can be adjusted.

All the above explanations are of my personal view. So correct me, if i m wrong.

Regards,

Pinky Agarwal.

Originally posted by : Ritesh Jain
	This rule was introduced last year but was not made applicable , this year in fianacila budget Finance minister has made it go through and thus trying to make a parity with GST.   THis is a drastic change and for service sector industries there is change in business scenerio. Can any body tell me 1) what will be the implication on the invoices which are standing issued as on 1st April 2011 i.e for companies showing amount as DEBTOR  as on 31st March 2011 against service provided or partially provided.?? 2) what will be happen when a comapny issues invoice of Rs 100/-  and subsequently is only able to realize Rs 80/- aginst that buttotal service was provided i.e say Rs 20/- became bad debt.????

from 1-4-2011, now no such deduction would be available without revise of return and effect of edbit / debit credit notes, 

" Invoices issued before 01.04.2011 will be treated as per old rules that on the basis of payment received. As point of taxation rules are made applicable from 01.04.2011.

Further, second issue is highly disputed and the same is not discussed by the government or is not taken into consideration while drafting these rules. This is very common problem and is required to be solved. In this case service tax will be charged on whole amount of invoice i.e on rs. 100 or the amount of service tax which being paid on amount of bad-debt may be refunded or can be adjusted.

All the above explanations are of my personal view. So correct me, if i m wrong.

as replied by

Pinky Agarwal."

Yup , regarding first issue it has been clarified straight forward in notification only.. so it is clear.

that only those invocies issued after 01.04.2011, this rule will be applicable.

Regarding second issue there is no clear cut information but I think government policy is to tax all the taxable services at its value irrespective of its realization except in the case where the service are partially or not fully provided.

"from 1-4-2011, now no such deduction would be available without revise of return and effect of edbit / debit credit notes,

--

As replied by U.S Sharma"

Yes , that is evident from the text of the amendments but I was asking about case of bad dedt, in that case there is no question of debit/credit note.

Regards,

RJ

The general change is that, the Ser Tax liability arises based on earliest of :- the Date on which service is provided or to be provided or Date of Invoice or Date of payment. Only the liability part is covered in Point of Taxation rules and there is no specific mention / change about taking Input credit w.r.t. the same.     Does this mean that Credit for the service tax in Purchase Invoices can be claimed only to the extent of the payment made against the same or can that also be taken on due basis. Can someone clarify?

Originally posted by : Vaidehi
	The general change is that, the Ser Tax liability arises based on earliest of :- the Date on which service is provided or to be provided or Date of Invoice or Date of payment. Only the liability part is covered in Point of Taxation rules and there is no specific mention / change about taking Input credit w.r.t. the same.     Does this mean that Credit for the service tax in Purchase Invoices can be claimed only to the extent of the payment made against the same or can that also be taken on due basis. Can someone clarify?

The rules were further amended by notification no. 25/2011 in which the service tax liablity will be on earlier of invoice issued or payment received.

And simulteneous change Cenvat credit rules is also made vide Notification No. 13/2011.

Regards,

Pinky Agarwal