Point of taxation in case of reverse charge

This query is : Resolved

CA Adarsh (Querist)
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23 April 2014 Dear All,

I have a query regarding the point of taxation in case of reverse charge as follows :-

We are paying commission to a foreign consultant on which service tax is applicable on reverse charge, the consultant has not issued us any bill for the commission due to him during the year. But we have to book the commission expense in the books so we recorded commission expenses in the books for the year ended on March'14 in the month of March itself for the service received during the year.

As per Rule 7 of Point of taxation rules, payment of service tax is to be paid within 6 months from the date of invoice.

But in our case, we do not receive the commission bill although the service has been received.

So Kindly suggest us whether service tax is to be paid or not and if yes what will be the point of taxation in that case.

arihant kumar jain

arihant kumar jain (Expert)
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24 April 2014 yes u have to pay service tax on import of service under reverse charge mechanism
and as per service tax pot rules u are liable to pay service tax on the date of payment
Date of payment or Invoice date which ever is earlier