in the case of reverse charge, only DATE OF PAYEMENT is to be considered to determine reverse charge liability

Exception

 

1.In case payment not made within 3 month of date of invoice,

Point of taxation will be expiry of such 3 months period (effective from 1.10.2014 onwards)

 (Note:- Earlier period was 6 months)

 

2.Import of Service from Associated Enterprise situated outside India

 In this case, although reverse charge is applicable,point of taxation will be

Date of payment

Or

Date of debit in books of person receiving service

Which ever is earlier

 

 

Examples

Q1 

Suppose Bill Received on 10 June on which Service tax applicable

Payment made on 15 July

When is Service tax payable

View Answer

Q2

Suppose Bill Received on 10 June on which Service tax applicable

Payment made on 15 Nov

When is Service tax payable

View Answer

Q3

Payment made in advance on 14 April

Bill received later on 10June

When is Service tax payable

View Answer

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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.