3 Replies
Pinky Agarwal
(Chartered Accountant)
(426 Points)
Replied 09 August 2011
There are a lot of merits and demerits of point of taxation rules...
Merits: Points of taxation leads a step forward towards GST.
Demerits: It has brought lot of complications in the system of accounting.
CA Unnikrishnan Nair N
(Chartered Accountant)
(2083 Points)
Replied 09 August 2011
Pinky's view is precise. It is a move towards GST. Further, under all other indirect taxes viz. central excise, customs and vat , the tax liability is on accrual basis while service tax is on payment basis. POT Rules aim to have uniformity. Main demerit is pot w.r.t. continues supply of services. There are lot of unanswered questions which will lead to long litigations.
Mihir
(Wealth Manager)
(5293 Points)
Replied 09 August 2011
Point of taxation - rule 3
There are three factors,
1) Date of invoice
2) Date of first advance received
3) Date of completion of service work
whichever is earlier, will be the point of taxation., and additionally, invoice to be prepared within 14 days of the above.
Yes, agree with Unnikrishnan, many questions are unanswered which is leading to lot of confusion.
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