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Service tax new rule for individual

ejaz naiyer (C.A. FINAL) (293 Points)

12 July 2012

I want to know whether Proprietor Business has to pay service tax on the basis of point of taxation rule or on the receipt basis. My one friend told me that individual is exempt from the new rule. And hence liable to pay tax ( Financial Year 2011-12) on receipt basis only not on invoicing basis.

Is it correct? please help me.

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2 Replies

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 13 July 2012

If you are rendering any service then your liability is at the time of raising the invoice, provided that your taxable turnover as last year exceeds Rs 10 lac. Also please not that if you are providing Rent-a Cab service then you are not liable to pay any service tax on the said service. Again if you are receiving certain specified services then you are liable to pay service tax on the date of payment made to the service providers.

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Alok Siddapur (Consultant) (229 Points)
Replied 14 July 2012

According to the amended Rule 6 of Service Tax Rules, where the aggregate of taxable services provided is Rs.50lakhs or less in the previous FY, then service provider being an individual or partnership firm shall have the option to pay tax on taxable services provided or to be provided by him upto Rs.50 lakhs in the current FY on receipt basis. (refer notification 3/2012-Service Tax)