Point of taxation query

This query is : Resolved

Rakesh Rao (Querist)
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24 May 2015 I am about to renew my Vehicle Insurance policy due in 1st week of June. The Premium breakup shows Service Tax is charged at the rate of 14%. As per Rule 4 of Point of Taxation Rules, if I make the payment in May itself, am I not liable for just 12.36% instead of 14%? Point of Taxation will be Date of Invoice or Date of Payment whichever earlier right i.e. May and not June. Please Advice. Thank you.

Vishakha Kejriwal.

Vishakha Kejriwal. (Expert)
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25 May 2015 In case of change in effective rate of tax, where service provision is after change of rate but payment has been made before such change, then in case invoice is raised after the change then point of taxation shall be the date of issuing of the invoice. Hence for invoice issued in June the rate of taxation would be 14% even though payment is made in the month of May.