Suppose new service become taxable for the first time,  or a new levy on services(KKC) . (New Amendment)

then no tax is payable if

  • Both Invoice issued and payment received before service becoming taxable
  • Payment received before service becoming taxable but invoice issued within 14 days of service becoming taxable



No tax is payable

if payment received in advance before sevice becoming taxable


invoice issued for the same (either before service becoming taxable or within 14 days of becoming taxable)


If invoice issed after 14 days, of service becoming taxable, then tax will be charged



Meaning of Date of Payment

 Date of Payment means

Date Payment entered in books


Date of Credit in bank account

Whichever is earlier



But In case of new service becoming taxable or change in rate of tax,

Date of Payment means

Date of Credit in bank account only

If following condition is satisfied

  • Such rate change or new service becoming taxable is between date of credit and date of payment
  • the payment is made by way of an instrument which is credited to a bank account, (Example-Cheque)
  • the credit in the bank account is after four working days from the date when there is change in effective rate of tax or a service is taxed for the first time;

Learn in your speed, with individual attention - Teachoo Maths 1-on-1 Class

Ask a doubt
CA Maninder Singh's photo - Co-founder, Teachoo

Made by

CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 13 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.