Contrary View to Hon’ble Delhi High Court decision quashing Circular No.154 & 158 with reference to Point of Taxation Rules, 2011.   In a recent judgment dated 01-02-2013, the Hon’ble High Court of Delhi, in the case of Delhi Chartered Accountants Society (Regd.) V/s Union of India & Others, C.M.No.9237/2012 (for stay, has quashed Circular No. 154/5/2012 – ST [...]

We are delighted to inform you that the Indirect Taxes Committee has come out with an “E-Handbook on Point of Taxation Rules, 2011”.  The electronic form of the Handbook increases its portability and allows you to access the same at any time and from any place convenient to you, thereby making it a ready referencer [...]

The question before us is what would be the rate of tax where (a) the service is provided by the chartered accountants prior to 01.04.2012; (b) the invoice is issued by the chartered accountants prior to 01.04.2012 but (c) the payment is received after 01.04.2012.

I am covering following points in this article- Valuation of service portion in works contract, CENVAT Credit availability in works contract, Point of Taxation in Work Contract Service

CENTRAL Board of Excise and Customs (CBEC) has issued clarification vides Circular No. 158/9/ 2012–ST dated. 8th May, 2012 on the rate of service tax applicable wherein invoices were raised before 1st April 2012 and the payments shall be after 1st April 2012 in case of the 8 specified services provided by individuals or proprietary firms or partnership firms, to which Rule 7 of Point of Taxation Rules 2011 was applicable and services on which tax is paid under reverse charge under section 68(2) of the Finance Act.

Circular No.155/6/ 2012 – ST It has been brought to the attention of the Board that some airlines are collecting differential service tax on tickets issued before 1st April 2012 for journey after 1st April 2012, causing inconvenience to passengers. Representations have also been received in this regard. The position of law in the above respect is clear and is detailed below.

As you all may be aware , as per the Finance Bill, 2012, service tax shall be leviable @ 12.36% w.e.f from 1st April, 2012. As per rule numbered 4 and 7 of Point of Taxation Rules, read with Section 38A of Central Excise Act, 1944, for any payment received on or after 01/04/2012 against invoices raised on or before 31/03/2012, service tax at the rate of 12.36% shall be applicable.

Amendments in Point of Taxation Rules, 2011 (the Point of taxation Rules) as prescribed by Notification No. 25/2011 – Service Tax dated 31 March 2011 effective from 1 April 2011. Amendments in the Cenvat Credit Rules, 2004 (the Credit Rules) vide Notification No.13/2011 – Central Excise (N.T.) dated 31 March 2011 effective from 1 April 2011

Ministry of Finance has today issued the above Notification amending Point of taxation Rules, 2011. Rules 7 has been substituted by a new Rule whereby, point of taxation in respect specified service providers which includes Chartered Accountants (individuals or proprietary firms or partnership firms) will be the date on which payment is received.

As you are aware, the Point of Taxation Rules (PTR) were formulated vide Notification No.18/2011-ST dated 01.03.2011. Based on the feedback, certain amendments are being carried out in these rules vide Notification No. 25/2011-ST dated 31.03.2011. The highlights of the changes are discussed in the following paragraphs. 2. While the rules shall come into force from 01.04.2011, an option has been given in rule 9 to pay tax on payment basis, as at present, till 30.06.2011. 3. Rule 3 has been amended to provide that the point of taxation shall be as follows: (a) Date of invoice or payment, whichever is earlier, if the invoice is issued within the prescribed period of 14 days from the date of completion of the provision of service.