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Definition of Continuous Supply of Service

It means

Continuous supply of service for 3 month or more with periodic payment

Or

Any service notified by Central Government as Continuous Supply of Service with or without condition

 

Point of Taxation In case of Continuous supply of service

In this case, service goes on continuously and there is no end date.

However, payment is made periodically on completion of event in contract (for example every month)

In this case, date of event shall be deemed to be date of completion of such service for the purpose of this rule

 

Example

Suppose Max Security Agency Pvt Ltd enters an agreement to provide Security guards to a Client A Ltd for 1 year starting from 1 June 2016 for 120000 p.a.

As per Contract,invoice is to be issued monthly for Rs 10000 per month on last day of each month.

Is it a Continuous supply of Service?

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What is date of completion of Service Provided for June?

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What is the last date of issuing an Invoice?

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Suppose Bill actually issued on 25 July and payment received on 14 August,When is Service tax payable

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  1. Service Tax
  2. Point of Taxation Rules
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About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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