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
Since payment made within 3 months
POT is 15 July (Date of Payment)
and it is to be deposited by 6 August
Q2
Suppose Bill Received on 10 June on which Service tax applicable
Payment made on 15 Nov
When is Service tax payable
View answer
Since payment not made by 9 September (within 3 months)
POT is 10 September (Date of Expiry of 3 months)
Service is to be deposited by 6 Oct
Q3
Payment made in advance on 14 April
Bill received later on 10June
When is Service tax payable
View answer
POT is 14 April (Date of Payment)
and it is to be deposited by 6 May
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Effect of Amendment from 1.10.2014
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| Till 30.9.2014 | From 1.10.2014 |
|
1.In case payment not made within 6 month of date of invoice,
Point of taxation will be as per Rule 3 (i.e. on service provided) |
1.In case payment not made within 3 month of date of invoice,
Point of taxation will be expiry of such 3 months period |
Note:-
This rule shall override the provisions of Rule 3, Rule 4 and Rule 8
Rule 3 POT in General Case (Normal Charge)
Rule 4 (POT in case of Change in Effective rate of tax)
Rule 8 (POT in case of Copyright etc)
It will not override other rules like
Rule 5 (Service becoming taxable for the first time)
or
Rule 8A (POT determined by CEO)
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S ummary