09 January 2012
sir, we are taking service of good transport agency in the month of nov and the gta is raising its invoice in month of jan. so please guide me that when does the liability of co. arises to book service tax in above case. in other words is point of taxation concept applicable in this case...
09 January 2012
In case of reverse charge mechanism rule 7(b) shall be applicable and as per the said rule point of taxation shall be the date on which payment is made to the service provider within the six month from the date of invoice. If payment is not made within the prescribed time line then point of taxation shall be determined as if rule 7 never existed and shall be determined as per rule 3 of the point of taxation rule.
So in your case liability shall be arisen when you make the payment to the service provider(GTA)..but ensure that you pay within six month from the date of invoice raised in order to avoid the consequences of rule 3 and interest thereon ..
CAclubindia
