Concept of Point of Taxation

Tax Practical
Practical Service Tax

It is compulsory to issue invoice within 30 days of providing service

However,if we receive an advance,we have to issue an invoice for the same within 30 days of advance

If we receive some payment in advance,we have to issue invoice for that partial amount first and then for balance after service provided within 30 days

Invoice is to be issued within 30 days of

Completion of service

Or

Whichever is earlier

#### Example

Q1 What is due date of Issuing Invoice in following cases?

 Service Provided Amount Received Due Date of Issuing Invoice 10-Jun-15 20-Sep-15 ? 10-Jun-15 20-Apr-15 ? 10-Jun-15 20-Apr-15    30% ? 18-Sep-15   70% ?

#### Continuous Supply of Service

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

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

Invoice is to be issued within 30 days of such event

Examples

Q2

A Ltd provides maintenance service to B for the whole year starting from 11 Sept 2015 to 10 Sept 2016

Billing for the same is done monthly after completion of every month of service

What is the last date of issuing Invoice for the first month?

-a-

Service is for the period 11 Sept 2015 to 10 Oct 2015 is to be billed

Date of completion of event in contract =10 Oct 2015

Bill is to be raised within 30 days of 10 Oct 2015 i,e, by 9 Nov 2015

-ea-

Q3 Suppose in Q2, bill is to be raised at the end of every calender month

What is the last date of issuing Invoice for the first month?

#### Time limit for issuing invoice is 45 days instead of 30 days for

• Banks
• Financial Institutions
• NBFC

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