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Service tax on security service payment calculation

VISHAL GUPTA (MBA-Finance) (145 Points)

06 July 2015

My Security Agency submitted the Security Serivice Bill for the month of May-2015 on dt. 31/5/2015 Rs.10000/- & Charged 12.36% Service Tax on 25% value i.e. 2500/-. I want to know that we had paid bill in the month of June than what is the Service tax rate will application for payment of Service tax 12.36% or 14% on 75% amount i.e. Rs.7500/-. Please suggest.

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13 Replies

abhishek agarwal (BRANCH CREDIT MANAGER) (796 Points)
Replied 06 July 2015

since service provisioning and invoice was issued itself in month of may 2015, therefore the rate of 12.36 % would be applicable.

afterwards 14 % would b levied (inclusive of all cesses).

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CMA Poornima Madhava (CMA) (13112 Points)
Replied 06 July 2015

Under RCM, POT shall be the date of payment as per rule 7. Hence ST would be applicable at 14% I think.

abhishek agarwal (BRANCH CREDIT MANAGER) (796 Points)
Replied 06 July 2015

Originally posted by : Poornima Madhava
	Under RCM, POT shall be the date of payment as per rule 7. Hence ST would be applicable at 14% I think.

as per pot rules where there is change of rate of tax, pot decision stands shift from rule 7.

Vikas (CA) (1135 Points)
Replied 06 July 2015

The query seems to be incorrect as the service recipient has to pay 100% Service tax on the manpower supply / security services w.e.f. 1 April 2015 vide Notification No.30/2012-ST read with No.7/2015.

Thus, you have to pay on the entire value.

Secondly, Poornima is right in terms of rate. Rule 7 shall be applicable to your case, meaning the rate prevailing at the time of payment should be applicable. Thus, you should Service tax on the entire value @ 14%.

ashish (article) (151 Points)
Replied 06 July 2015

As per clause (ii) of rule 4 of point of taxation rules 2011,:::::::::In case taxable service has been provided before change of rate And Invoice issued prior to date of change in service tax rate........then rate on invoice date will be applicable.................In your case...., service provided for may2015 and invoice issue on 31-05-2015..(both prior to change)......Therefore applicable rate in your case is 12.36% AND NOT 14%..............

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abhishek agarwal (BRANCH CREDIT MANAGER) (796 Points)
Replied 06 July 2015

Originally posted by : ashish
	As per clause (ii) of rule 4 of point of taxation rules 2011,:::::::::In case taxable service has been provided before change of rate And Invoice issued prior to date of change in service tax rate........then rate on invoice date will be applicable.................In your case...., service provided for may2015 and invoice issue on 31-05-2015..(both prior to change)......Therefore applicable rate in your case is 12.36% AND NOT 14%..............

agree with u buddy

ashish (article) (151 Points)
Replied 06 July 2015

Sorry...I have not noticed that case is falling under reverse charge........yes in this case rule 7 wiill applies and date of payment will be point of taxation i.e. 14% will be leviable......................MISTAKE IN READING QUERRY IS HIGHLY APPOLOGIZED..........

ashish (article) (151 Points)
Replied 06 July 2015

No dear abhishek.....when rate of tax change rule 7 does not stand shift from pot.......But. You can see rule 4 override rule 3......BUT RULE 7 OVERRIDE ALL RULES OF POT........

pankaj (finance) (52 Points)
Replied 07 July 2015

Right rule 7 will be applicable & st pay will be @ 14%

Shyam C.Pujara (Student (C.A Final)) (177 Points)
Replied 09 July 2015

Originally posted by : abhishek agarwal
	since service provisioning and invoice was issued itself in month of may 2015, therefore the rate of 12.36 % would be applicable. afterwards 14 % would b levied (inclusive of all cesses).

And now as per amendmend ST must be 100 % paid by service receiver under reverse charge method

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SURESH (M.Com) (23 Points)
Replied 09 July 2015

SERVICE RECEIVER HAS TO PAY THE SERVICE TAX OF 14%

Vineeth PN (Account Assistant) (687 Points)
Replied 09 July 2015

as per new amendmend service reciever is compony /pvt ltd company they hav to pay 14% of service tax.you can refer point of taxation rule 2010 service tax determination of point of taxation in case of change in effective rate of tax