10 July 2013
Dear Sir/madam If a person (say Mr. A ,who is liable to pay service tax under reverse charge on legal services received from an individual lawyer say Mr. B) received services before 1/7/2012 AND Mr. B raised invoice after the above said date and subsequently payment was made, then my query is whether Mr. A is liable to pay service tax on the above said services. Pls note that provision of services was before July 1st, 2012 and payment and invoice was occured after the above date. Before 1-7-2012 these services were exempt and now are taxable under reverse charge mechanism.
10 July 2013
1)In case of some services, reverse charge mechanism is applicable w.e.f. 1-7-2012 i.e. service tax is payable (partly or wholly) by service receiver..
2)In view of section 67A (which is effective from 28-5-2012), service tax will not be payable by service receiver under reverse charge mechanism, if service was provided prior to 1-7-2012, even if payment is received later.
3)This will be so even if invoice was issued after 1st July 2012. However, to avoid controversy, it is advisable to date invoice prior to 30-6-2012
[Note that Point of Taxation Rules cannot override provisions of section 67A].
CAclubindia
