At the time of books closing (i.e year end), if the invoice is raised for the services to be provided and payment is also not received , then what will the point of taxation? are we liable to pay service tax without its collection? Please explain with example. Our ERP system is SAP.
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Service tax point of taxation
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Dear Nitin
The Point of taxation in service tax as per Rule 3 of Point of taxation Rules is the Earlier of Date of raising an Invoice or Receipt of Payment. Hence you need to discharge service tax as and when the Invoice is raised irrespective of the receipt of consideration for services provided
Ex Invoice Date 31.03.2015
payment date 5.04.2015
Here the Laibilty arises on 31.03.2015 and hence need to be discharged in respective due date
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