Budget 2014 – Changes in the Point of Taxation Rules, 2011 (The POT Rules) Vide Notification No. 13/2014-ST Dated 11-7-2014, by amending Point of Taxation in respect of Reverse Charge (Effective From 1-10-2014).

Notification No. 13/2014-Service Tax (N.T.), Dated: July 11, 2014 amends Point of Taxation Rules, 2011. As per the first proviso to Rule 7 of POT Rules, 2011, for reverse charge services, if payment is not made within a period of 6 months of  the date of invoice, POT will be governed by Default Rule 3 of POT Rules, 2011.
However, first Proviso to rule 7 of the Point of Taxation Rules (POTR) is being amended to provide that point of taxation in respect of reverse charge will be the payment date or the first day that occurs immediately after a period of three  months from the date of invoice, whichever is earlier. This amendment will apply only to invoices issued after 1st October,  2014. A transition rule is being prescribed (new rule 10 of POTR).

Notification No. 13/2014–Service Tax

New Delhi, the 11th July, 2014

G.S.R. 482(E)- In exercise of the powers conferred by clause (a) and clause (hhh) of sub-section (2) of section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the Point of Taxation Rules, 2011, namely:—

1. (1) These rules may be called the Point of Taxation (Amendment) Rules, 2014.

(2) They shall come into force on the 1st day of October, 2014.

2. In the Point of Taxation Rules, 2011,–

(a) in rule 7,–

(i) for the words ―contained in these rules the ‘words and figures’ ―contained in rules 3,4, or 8‖ shall be substituted;

(ii) for the first proviso, the following proviso shall be substituted, namely:-

“Provided that where the payment is not made within a period of three months of the date of invoice, the point of taxation shall be the date immediately following the said period of three months:‖;

(b) after rule 9, the following rule shall be inserted, namely:-

“10. Notwithstanding anything contained in the first proviso to rule 7, if the invoice in respect of a service, for which point of taxation is determinable under rule 7 has been issued before the 1st day of October, 2014 but payment has not been made as on the said day, the point of taxation shall,–

(a) if payment is made within a period of six months of the date of invoice, be the date on which payment is made;

(b) if payment is not made within a period of six months of the date of invoice, be determined as if rule 7 and this rule do not exist.

[F. No.334/ 15 /2014 -TRU]

(Akshay Joshi )

Under Secretary to the Government of India

Note: The principal notification was published in the Gazette of India, Extraordinary, vide notification No. 18/2011 – Service Tax, dated the 1st March,2011 vide number G.S.R. 175 (E), dated the 1st March, 2011 and last amended by notification No. 37/2012-Service Tax, dated the 20th June, 2012 vide number G.S.R.479 (E), dated the 20th June, 2012.

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