Date of invoice and liablity of s.t. for manpower supply

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GAURANG KACHHIA (Querist)
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04 April 2015 As we are following mercantile accounting system . I want to know if a manpower agency send a bill for manpower supply for the month march 15 to a corporate entity, so on which date i should issue invoice on 31st march2015 or after 31st march 2015. because client demanding invoice dated after 31st march 2015. i.e invoice date on or after 01/04/2015 so in that case what will be our liability regarding the ST liability.???? as the there is amendments in the notifiaction w.e.f. 01/04/2015 the liability of paying S.T. is 100% on service receiver if service receiver is coporate entity.

JUGAL PATEL

JUGAL PATEL (Expert)
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04 April 2015 It is better to issue invoice on or after 1.4.2015 and to also take payment on or after 1.4.2015 due to the following two situations for service provider.

1) If invoice is issued within 30 days of completion of service: In our case if we issue invoice within 30 days of completion of service i.e. on or after 1.4.2015, point of taxation shall be date of invoice or date of payment whichever is earlier. Finally, point of taxation will be on or after 1.4.2015, so, the service receiver will be liable to pay 100% service tax under reverse charge mechanism.

2)If invoice is not issued within 30 days of completion of service: In our case, if we issue invoice after 30 days of completion of service i.e on or after 1.4.2015, point of taxation will be the date of completion or the date of payment whichever is earlier. So, we will be liable to pay 25% of service tax considering the date of completion as per Rule 3 of POT Rules. But if the client makes payment on or after 1.4.2015 then Rule 7 of POT Rules will override Rule 3 and service receiver will be liabile to pay 100% service tax under reverse charge mechanism.

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GAURANG KACHHIA

GAURANG KACHHIA (Querist)
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04 April 2015 THANK YOU VERY MUCH SIR.. IT IS VERY RIGHTLY YOU SAID.. THANK YOU VERY MUCH.
SO I JUST WANT TO ASK ONE THING AS PER ACCRUAL ACCOUNTING I HAVE TO BOOK INCOME AGAINST EXPENSE SO FOR MARCH EXP I HAVE TO RAISE A INCOME AS MANPOWER SUPPLY SO I MAKE A PROVISION FOR INCOME OR MAKE A BILL..
BECAUSE I MAKE A PROVISION FOR EXP FOR THE SAID INCOME.

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