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CERTIFICATE COURSE ON INDIRECT TAXES – SERVICE TAX

CERTIFICATE COURSE ON INDIRECT TAXES – SERVICE TAX . by g. natarajan advocate, swamy associates. POINT OF TAXATION RULES. Introduced vide Notification 18/2011 ST Dt. 01.03.2011. Effective from 01.04.2011 / 01.07.2011.

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CERTIFICATE COURSE ON INDIRECT TAXES – SERVICE TAX

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  1. CERTIFICATE COURSE ON INDIRECT TAXES – SERVICE TAX by g. natarajan advocate, swamy associates

  2. POINT OF TAXATION RULES • Introduced vide Notification 18/2011 ST Dt. 01.03.2011. • Effective from 01.04.2011 / 01.07.2011. • Good Bye to realisation based Service Tax payment – Rule 6 of ST Rules, 1994. • Not applicable to Individuals, Proprietary concerns & Partnership firms of • - Chartered Accountants. • - Cost Accountants. • - Company Secretaries. • - Architects. • - Interior Decorators. • - Legal services. • - Scientific and Technical Consultancy services. • - Consulting Engineers.

  3. Rule 6 of the Service Tax Rules • 6. Payment of service tax. The service tax shall be paid to the credit of the Central Government, • by the 6th day of the month, if the duty is deposited electronically • through internet banking; and • (ii) by the 5th day of the month, in any other case, • Immediately following the calender month in which the service is deemed to be provided as per the rule framed in this regard. • Rule 2(e) of the Point of Taxation Rules • “Point of taxation means the point in time when a service shall be deemed to have been provided”

  4. Rule 3 of the Point of Taxation Rules 3. Determination of point of taxation.- For the purposes of these rules, unless otherwise provided, 'point of taxation' shall be,- (a) the time when the invoice for the service provided or to be provided is issued: Provided that where the invoice is not issued within fourteen days of the completion of the provision of the service, the point of taxation shall be date of such completion. (b) in a case, where the person providing the service, receives a payment before the time specified in clause (a), the time, when he receives such payment, to the extent of such payment. Explanation.- For the purpose of this rule, wherever any advance by whatever name known, is received by the service provider towards the provision of taxable service, the point of taxation shall be the date of receipt of each such advance.”.

  5. Provision of Service or Issue of Invoice or Receipt of Payment – whichever is earlier – Is the point of taxation.

  6. CONTINUOUS SUPPLY OF SERVICE • “continuous supply of service” means any service which is provided, or to be provided continuously, under a contract, for a period exceeding three months & services specifically notified, viz., commercial or industrial construction, construction of complex, telecommunication, internet telecommunication & works contract. • Explanation 1.– For the purpose of this rule, 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 service receiver to make any payment to service provider, the date of completion of each such event as specified in the contract shall be deemed to be the date of completion of provision of service. • Circular No. 144/13/2011 Dt. 18.07.2011.

  7. SPECIAL PROVISIONS • For export of services, POT shall be the date of receiving payment. • (But payment should be received within the time prescribed by RBI). • Reverse Charge Liabilities – Date of making payment. • (But payment should be made within 6 months) • Associated enterprises – date of credit in books / date of payment • whichever is earlier. • IPR Services – when payment is made / received.

  8. MISCELLANEOUS • Adjustment of ST paid, if service is not provided (wholly or partially) • or the value is renegotiated, subject to refund / credit note in • favour of the customer {Rule 6(3) of ST Rules, 1994}. • No relief for Bad Debts.

  9. POT IN CASE OF CHANGE OF ST RATES

  10. Service provided before change of rate

  11. Service provided after change of rate

  12. Applicability of change of rate – Service provided before change of rate. (Assuming the service provider has opted for POT from 1st April 2011 and the rate of tax changed on 1st July 2011)

  13. Applicability of change of rate – Service provided after change of rate. (Assuming the service provider has opted for POT from 1st April 2011 And the rate of tax changed on 1st July 2011)

  14. Thank you g. natarajan 93400 54477 mail@swamyassociates.com

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