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Service tax liability of payment basis

Ram kr. (Buisness) (883 Points)

19 October 2012

Dear Experts,

A service tax liability arises when a service receipient make a payment. It means a Service receiver is liable to pay tax when he will make a payment. Am i write. Pl advice.

Thanks

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3 Replies

CA. Sandeep Kumawat (CA) (341 Points)
Replied 19 October 2012

Pls refer link /articles/point-of-taxation-rules-2011-an-overview-15398.asp

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phani kumar (student) (32 Points)
Replied 20 October 2012

Dear friend Your opinion is correct. In case of reverse chargindg cases tax liabilty is on payment basis i.e., as and when paid, provided such paymenet should be done within 6 months fronm invoice date. If bill amount was not paid within 6 months,then point of taxation will go for back date i.e.,INVOICE DATE service receiver have to pay the service tax with interest .

Saket Sinha (Student) (129 Points)
Replied 24 October 2012

Dear Freind,

In case of reverse charge service receiver is liable to pay service tax .There are some services fall under this category. In other cases service provider will be liable to pay the tax.As per Point of Taxation rules ,2011 date on which sevice has been deemed to be completed shall be determined.

In case of reverse charge service tax liability shall arise only when he makes payment.In this case pont of taxation would be date of payment. If service receiver doesnt make payment within 6 months of the date of issue of invoice then point of taxation shall be determined as per Rule 3 of Point of Taxation Rules 2011.