Service tax Payable on billing basis from July 1 2011

The Finance Act, 2011 has introduced with effect from April 1, 2011, Point of Taxation Rules in which, these rules will determine the point in time when the services shall be deemed to be provided. The general rule will be that the time of provision of service will be the earliest of the following dates: i. Date on which service is provided or to be provided ii. Date of invoice iii. Date of payment Vide notification no.18/2011, these rules were made applicable from April 1, 2011, but these rules were amended vide notification no.25/2011 where in the tax payer was given an option to pay service tax on receipt basis till June 30, 2011 or pay service tax on billing basis from April 1, 2011. The option to pay service tax on receipt basis is only till June 30, 2011 hence all the assesses, except professionals, will have to pay service tax on billing basis from July 1, 2011.