Sb cess

Yes I do agree with your proposition. Hon’ble SC in the case of Wazir Sultan Tobacco had held that the exigibility is determined on the date of manufacture. Thus, if a levy is introduced for the first time, the same should only be applicable on the goods manufactured on or after the date of levy.

If a similar analogy is drawn, an argument may be taken that the services were not liable to be taxed if provided prior to 15 November 2015. Thus, the question of taxability does not arise.

Further, Rule 7 merely gets authority from Rule 6(1) of the Service Tax Rules, 1994, which prescribes for the date on which the services are deemed to be provided. You may also refer to the definition of ‘Point of taxation’ under Rule 2(e) of the POTR. Thus, it prescribes for a facilitation as when the services are ‘deemed’ to have been provided for payment of Service tax and not actually when the services are provided.

One can also note that Rule 5 is only applicable on the new services. In this case, the services are not new but the levy is new.

Lastly, applicability of Rule 5 is merely provided vide a press release, which may be read for the benefit of the assessee.