Service tax liability of payment basis

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Dear Experts,

A service tax liability arises when a service receipient make a payment. It means a Service receiver is liable  to pay tax when he will make a payment. Am i write. Pl advice.

Thanks

Replies (3)
Pls refer link /articles/point-of-taxation-rules-2011-an-overview-15398.asp

Dear friend Your opinion is correct. In case of reverse chargindg cases tax liabilty is on payment basis i.e., as and when paid, provided such paymenet should be done within 6 months fronm invoice date. If bill amount was not paid within 6 months,then point of taxation will go for back date i.e.,INVOICE DATE service receiver have to pay the service tax with interest .

Dear Freind,

In case of reverse charge service receiver is liable to pay service tax .There are some services fall under this category. In other cases service provider will be liable to pay the tax.As per Point of Taxation rules ,2011 date on which sevice has been deemed to be completed shall be determined.

In case of reverse charge service tax liability shall arise only when he makes payment.In this case pont of taxation would be date of payment. If service receiver doesnt make payment within 6 months of the date of issue of invoice then point of taxation shall be determined as per Rule 3 of Point of Taxation Rules 2011.

I

 


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