Dear all
Under Rule 6 of the new Point of Taxation Rules, In case of continuous supply of service, the whole or part of which is determined or payable periodically or from time to time, shall be treated as separately provided at the date on which the payment is liable to be made by the service receiver, if such date is specified in the contract.. A Builder provided in his allotment letter/contract for payment of installments. Here, the allotment letter itself is the invoice and schedule of payment is prescribed in itself. Builder generally does not make any bill/invoice separately. As per the payment schedule, Rs. 2.00 should be paid within 15 days from 15.01.2011 and another Rs. 2.00 within 15 days from 15.03.2011. But the client paid both the installments, say, on 1/05/2011. In this scenario, whether the liability to pay tax arises on the date of receipt of payment i.e. 01/05/2011 or will it be treated as service provided as per Rule 3 of the said Rules and as such liability arises on 01/04/2011 i.e. date on which the new Rules come into effect?.
Regards
CS Saju Philip
CAclubindia
