Specific Query for Change in S.Tax in Cont. Supply, where partial advances are recd.
Case: Total Service Provided Value - Rs. 100,000/- Advance Received - Rs. 60,000/-
Service Tax Rate upto 30.9.2014 - 7.416% from 1.10.2014 - 8.652%
Date of Advance - 20.9.2014 Date of Completion of Service - 5.10.2014 Date of Invoice - 5.10.2014 Date of Change in S.Tax - 1.10.2014
Question: 1. In the above case,if S.Tax to be applied on earliest of adv or completion, then do we need to apply old rate only on Adv. 2. At What S.Tax Rate Invoice needs to be issued ? How to compute the liability - Should adv to treat at old rate and bal. at new rate or any other solution
Kindly clarify as there is a practical difficulty.
19 September 2014
when the service has been provided before the change in effective rate and where the payment is also received before the change in effective rate of tax, but the invoice for the same has been issued after the change in effective rate of tax, the point of taxation shall be the date of payment;
IF the service has been provided after the change in effective rate and where the invoice has also been raised after the change in effective rate of tax but the payment has been received before the change in effective rate of tax , the point of taxation shall be date of issuing of invoice.
Querist :
Anonymous
Querist :
Anonymous
(Querist)
19 September 2014
Thanks mam for your answer.
However question remains in the above instance a) Whether Receipt of Advance be considered as payment ? Don't we need to pay S.Tax on advance since the same is before issue of invoice b) If S.tax is paid on Adv at Old rate, what would be the s.tax rate to be levied in Invoice issued after change.
Kindly clarify in the light of the above example in my original question
CAclubindia
