Sec.67A combined with Rule 5 of POT. As per sec.67A, rate, value and exchange rate is determined on the date of provision of service. Hence, when a service is provided and then a new levy is brought in, will it mean the service will be taxed at 0%? Because when the service was provided there was no ST on it. Please clarify on this regard.
8 Replies
TKKKKKK
(PRACTICING CA)
(3268 Points)
Replied 16 March 2013
plz refer rule 4 of point of taxation rule.sir.if you have get advance or you have issued invoice before applicabality of new tax rule.service is not taxable .
Aravind..
(CA)
(1262 Points)
Replied 17 March 2013
I think rule 4, applies for change in effective rate of tax. Rule 5, is for new levy. As per section 67A, the rate of service tax, value of a taxable service and rate of exchange, in force or as applicable at the time when the taxable service has been provided or agreed to be provided is relevant. So automatically, when a service is provided before it is subject to tax, it becomes not taxable.
TKKKKKK
(PRACTICING CA)
(3268 Points)
Replied 17 March 2013
sorry i have made mistake in writing.refer rule 5.
you had to receive payment before service became taxable and you had to issue invoice within 14 days of the date when the service is taxed for the first time. then you have to not pay service tax.
Aravind..
(CA)
(1262 Points)
Replied 18 March 2013
Ya, that is as per rule 5. But it is provided that POT rules will be used hereafter to determine the liability and not the rate. Hence, rate at the time prevailing on rendering of service tax is applicable. So, when there is a new levy, before which the service is rendered, there is no rate on the service so rendered.
Manoj Agarwal
(Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com)
(3456 Points)
Replied 20 March 2013
As per Supreme Court judgement, the taxable event for levying Service Tax is the rendering of service.
further, the statutory provision of section 67A inserted w.e.f. 28-05-2012 has much more force then the POT Rules, 2011
Manoj Agarwal
(Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com)
(3456 Points)
Replied 27 March 2013
Dear Arvind,
Kindly read my Article named Section 67A - Analysis with respect to Point of Taxation Rules, 2011 and revert. The Article contains my views based on Explanatory Memorandum to Union Budget 2012-13.
/articles/section-67a-analysis-with-respect-to-point-of-taxation-16570.asp
Regards,
tax2001-it @ yahoo.com
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