Point of taxation

This query is : Resolved

Sunil Kumar Gaur (Querist)
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02 February 2012 Hi

Please answer.

After the introduction of point of taxation rules if invoice has been raised and services completed and due tax has been paid what happens if

1. Providor receives only part payment say 80% and gives a 20% discount
2. If no payment is received and debt has gone bad.

CA Ankit Gulgulia (Jain)

CA Ankit Gulgulia (Jain) (Expert)
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02 February 2012 In First Case : the Differential Service tax credit can be availed.

In Second Case: That is In Case of Pure Bad Debt the amount of Service tax shall be a dead loss and no Credit shall be available.

Sunil Kumar Gaur

Sunil Kumar Gaur (Querist)
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02 February 2012 Thanks Ankit. But I think issue of credit memo is must in this case. What happens if the purchasing party has claimed full credit and do not reverse.

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PUNEET GOYAL

PUNEET GOYAL (Expert)
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03 February 2012 As per second proviso of rule 4 (7) of CENVAT Credit Rules, 2004, if payment is not made within 3 months from the date of invoice etc then service receiver has to pay amount equal to CENVAT credit availed.