applicability of amendments in service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 April 2011 for monthly payment of service tax of April 11

whether we should follow old receipt basis method or service tax payment liability will arise on raising of bill ?

whether we require to pay service tax on the bills raised in march but amt received in april separately?

what is about input credit - is that on payment basis or on accrual basis?

pl guide me about the date of implementation of new amendment of accrual basis for payment liability.

srinivasan

srinivasan (Expert)
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30 April 2011 For the monthly payment of service tax for April 11

1. Transition provision has been enabled in Point of taxation rules vide Not. No. 25/2011 ST dt. 31.3.2011 upto June 11. Therefore you can choose to follow either old or new method upto that period (but be consistant)

2. This is answered in the first query itself.

3. CENVAT credit rules have not allowed input service tax credit to be taken at the time of accounting of the invoice itself. If the payments for the same (including the service tax amount) is not made within 3 months the credit that was taken has to be reversed. Failure to reverse will attact interest. However, you can once again take the credit when you actually make the payment.

4. The new point of taxation (provision of service or invoicing or receipt which ever is earlier) basis will be in force from 1st april 2011 onwards hoever one has the option to continue with the old system upto june 2011. But necessarily have to shift towards the new system from 1st July 2011 onwards