Compliance Under Service Tax – 2012-13 – Bank Audit
The compliance under service tax provisions post Finance Bill 2012 may need clarity on 3 aspects which are discussed as under:
I. Small Service Provider Exemption
The basic exemption is available to the CA whose taxable services in 2011-12 did [does] not exceed Rs.10 lakhs. Such CA would not be liable to service tax for services provided in 2012- 13 upto a value of Rs. 10 Lakhs. Once the limit is exceeded then they would be liable for the incremental services beyond Rs. 10 Lakhs.
Therefore if eligible for the exemption, no need to charge any service tax for the bank audit.
II. Date of Billing
The Bank audit could have commenced in March 2012, however the completion of the services would be in April/ May 2012. Since the completion of service is important, as per the Point of Taxation Rules {POTR} the rate of service tax would be: Basic- 12% EC- 0.24 SHEC- 0.12- Total 12.36%.
This is so because we do not receive any advance and billing prior to provision of service would not change the rate.
III. Date of payment
The date of payment would be irrelevant this year as the rate of 12% is effective for the year and changes if any are only expected to be in Budget 2013.
This is for general guidance of members, however, members may take their independent and correct view regarding chargeability of service tax.
For any further queries please host on www.pdicai.org or send to idtc@icai.org
The invoice raised before 31st March 2012 has no legal sanctity as any claim made against the invoice would not be tenable. Since the services will be rendered after 31st March.,the NEW rate of service tax would apply
My Query is we are making bills for audit fees (as clients wants to make provision) for FY 11-12. Audit will start in May 2012 and payment received after that. What rate of service tax to be charged as invoice raised before 31st March 2012.