Continuous supply of service(csos)

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Yatin Sharma (Querist)
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28 December 2014 if services has been provided in part but payment is made in lumpsum .... even den it will be called csos.... if not then how pot will be calculated. ..??

CA Robin Betala

CA Robin Betala (Expert)
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29 December 2014 Continuous supply of service means any service provided or agreed to be provided continuously or on a recurrent basis under a contract for a period exceeding three months with the obligation for payment periodically or from time to time. Continuous supply of service also includes those services the Central government prescribed by a notification in the official gazette.

Examples of continuous supply or service are services like renting of premises and insurance. Notified services such as telecommunication, commercial or industrial construction, construction of residential complex, Internet communication, and works contract service will constitute continuous supply of services irrespective of the period for which they are provided or agreed to be provided.

In case of continuous supply of service, which is determined periodically on the completion of an event and requires the receiver of service to make any payment to the service provider, the date of completion of each such event as specified in the contract is deemed to be the date of completion of provision of service [Rule 3 in Proviso of Point of Taxation Rule, 2011]. In case of construction contract, if the contract provides for payment of certain amounts at each stage like plinth, slab, plaster and finishing, each such event will be the date of completion of provision (that part) of service.

Take an example. Ms Priya rendered a taxable service to a client. A bill for Rs 40000 was raised on 29 April 2013. Rs 15000 was received from the client on 1 May 2013. The balance on 23 May 2013. No service tax was separately charged in the bill. The questions are: Is Ms. Priya liable to pay service tax, even though it has not been charged by her? In case she is liable, what is the value of taxable service and the service tax payable? When is the point of taxation (PoT)?

Source :- http://www.capitalmarket.com/CMEdit/story11-37.asp?SNo=691109

In my opinion your case is not of CSOS and POT will be on invoice issue or payment recd. which ever is earlier