commercial training

This query is : Resolved

C.A Tarun Shah (Querist)
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26 December 2009 DEar all
We are franchisee of Aptech & give compute r training for Animation .We will raised inv.at the time of admission of students & we also give the facility of EMI to students .Now suppose we hv raised bills on f.y 2008-09 (s.t @ 12.36% ) & emi recd.on f.y 2009-10 (prevaling s.tax @ 10.30% )so pl.tell us at which rate we hv to pay s.tax on EMI recd.in 2009-2010

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
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26 December 2009 The receipts pertaining to service provided after 24.02.2009 is liable for service tax at 10% and not for the receipts pertaining to service provided prior to that rate.

It is very important to note that in case of service tax, the point of levy is on the service provided and point of collection is on realization. Therefore the service tax has to be paid at the rate prevailing at the time of provision of service on the date of realization.
Hence, it is to be verified whether the EMI received in FY 2009-10 pertains to services provided prior to 24.02.2009 or thereafter. If it is prior to that then the rate is 12.36% otherwise 10.30%.