When the liability to service tax arises

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saurabh kumar (Querist)
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09 January 2013 if the bill was raised in 25/03/2011 and its amount is received on 25/02/2012 then what are the treatments in service tax? plzz help

Sanjay Singhal

Sanjay Singhal (Expert)
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09 January 2013 Under Section 67, Service tax is levied on the gross or agreegate amount charged by the service provide to the receiver.

Under Rule 6(1)(b) of the point of Taxation Rules, 2011, where the person providing the service, receives a payment before the time specified in clause (a), the time, when he receives such payment to the extent of such payment.

Hence,considering Rule 6 (1), in the above case, the invoice raised is preceeding the receipt of payment. Hence, Service tax has to be remitted on 5th April 2011 though the payment would have been received in Feb'12, which is almost one year from the date of raising of invoice.

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