Hello Everyone,
I want to ask, What will be the Point of Taxation if payment is not made within 6 months from the date iof receipt of service. As i have read in an article form ICAI website that if payment is made within 6 months from the date of receiving service the point of taxation will be the date of payment. But what if payment is not made within 6 months?
Please furnish your expert view on this topic.
Thanks & Regards.
Abhishek
As per rule 4(7) - POT will be the date of payment, provided payment is made within 6 months.However, if the payment is not made withing 6 months, the rule will not apply.
Accordingly the POT will be -
- time when the invoice is issued (if the invoice is not issued within the specified time lines under rule 4A, time when the provision of services is completed.
- If the payment is received before raising the invoice, then POT = date of receipt of payment. In case the in case of continuous supply of service where the provision of the whole or part of the service is determined periodically on the completion of an event in terms of a contract, which requires the receiver of service to make any payment to the service provider, POT = the date of completion of provision of service
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