Point of taxation

is it true that as per point of taxation rules,2011 w.e.f. 1/4/11 service tax is to be paid on billing basis whereas earlier it was on the basis of receipt of payment of taxable service?
 

Replies (5)

Yes,

In most cases, Point of taxation has been made on accrual basis. Please refer to Notifications No.18/2011-ST attached below:

Also refer to Notification No.25/2011-ST dated 31.03.2011 amending the above Point of Taxation Rules. It is more important to go through the amendments under the above Notification. The link for the same is given below:

https://www.servicetax.gov.in/notifications/notfns-2k11/st25-2k11.htm

The Point of Taxtion is applicable from 1.7.2011, Before that you can use any of two method as per my knowledge and Practical Exprience.

any means:

Receipt of Payment

or

Point of taxation

Service Tax is to be paid on accrual or receipt basis whichever is earlier.

 

If any advance is received before providing any taxable service, then it taxable on receipt of advance.

 

Point of taxation rules says Invoice need to be issued within 14 days of providing taxable service, then taxable point will de the date mentioned in the invoice.

 

If invoice is not issued within 14 days then point of taxation will be the date when the taxable service is provided.

 

As rightly pointed out by "Ashish" there is an option to follow any of the two methods upto 30.06.2011.

 

For Professional people point of taxation rule does not apply ie they can continue paying service tax on receipt basis for the entire year.

 

smileythanks for the information.

 

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