19 July 2014
1.Credit can not be taken to pay service tax under reverse charge. you have to make payment in cash. 2. When to pay - normal service tax rules applies.
20 July 2014
Point of taxation where reverse charge applies:-
In case of such services, the point of taxation shall be the date on which payment is made to service provider, if the payment for such service is made within three months from date of invoice [This period was six months upto 1-10-2014].
If the payment for such service is not made within three months from date of invoice, the point of taxation will be the date immediately following the period of three months – first proviso to rule 7 of POT Rules as amended w.e.f. 1-10-2014.
Thus, if payment is not made to service provider within three months, service tax becomes payable.
As per rule 10 of Point of Taxation Rules (as inserted w.e.f. 1-10-2014), in case of invoices of date prior to 1-10-2014, the provision of earlier rule 7 will apply i.e. six month period will be allowed. If payment is not made within six months, service tax with interest will become payable – explained in para 4.1.4 of MF(DR) letter No. 334/15/2014-TRU dated 10-7-2014
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