Service Tax : We have updated the Point of Taxation Rules 2011 as introduced by Notification No. 18/2011-S.T., dated 1-3-2011 with Notification ...
Service Tax : The Point of Taxation Rules, 2011 (in short POT Rules) was introduced w.e.f. 01-04-2011 to define and determine the point of taxat...
Service Tax : Requirement of completion certificate vary from state to state. In case of Mumbai local authority provides for completion certific...
Service Tax : The Point of Taxation Rules, 2011 were notified on March 1, 2011 and have been amended from time to time. As mentioned in my earli...
Excise Duty : Cenvat credit in respect of input to be claimed within six months from the duty paying document with effect from 01.09.2014. [ Not...
Service Tax : The Bank audit could have commenced in March 2012, however the completion of the services would be in April/ May 2012. Since the c...
Service Tax : Ministry of Finance has today issued the above Notification amending Point of taxation Rules, 2011. Rules 7 has been substituted ...
Service Tax : The Point of Taxation rules, which will allow tax authorities to link the payment of service tax to provision of service, raising ...
Service Tax : The finance ministry is in a fix over the proposed implementation of point of taxation rules for service tax from October 1 this y...
Service Tax : The Government of India (“GOI”) has released the draft Point of Taxation (for Services provided or Received in India) Rules, 2...
Service Tax : CESTAT emphasized that Point of Taxation Rules are not applicable when service is provided, and invoice is issued before introduc...
Service Tax : Recently, in Union of India v. Intercontinental Consultants and Technocrats Pvt. Ltd., Hon’ble SC had resolved the existing con...
Service Tax : 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...
Service Tax : Where there is change in the liability or extent of liability of a person required to pay tax as recipient of service notified und...
Service Tax : Circular No.155/6/ 2012 – ST It has been brought to the attention of the Board that some airlines are collecting differential se...
Service Tax : As you are aware, the Point of Taxation Rules (PTR) were formulated vide Notification No.18/2011-ST dated 01.03.2011. Based on th...
In case of individual / partnership firms (including LLPs) whose aggregate value from one or more premises is 50 lakhs or less in previous financial year , the service provider may pay tax on receipt basis upto 50 lakhs taxable value. Beyond 50 lakhs, service tax will have to be paid on the mercantile basis on the basis of issue of invoice.
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.
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%.
The Finance Act, 2011 has introduced with effect from April 1, 2011, Point of Taxation Rules in which, these rules will determine the point in time when the services shall be deemed to be provided. The general rule will be that the time of provision of service will be the earliest of the following dates: i. Date on which service is provided or to be provided ii. Date of invoice iii. Date of payment
Even before the PoTR, 2011 see the light of the day, a major surgery was carried out wherein the whole focus for the events determining PoT was shifted to issue of invoice. Notification No. 25/2011 dt. 31st March, 2011 made many changes in the PoTR making it necessary for the SP to sit down and re-do the whole exercise once again. As if the confusions were not enough, Notification No. 26/2011 dt. 31st March, 2011 added few more. This analysis incorporates these amendments. CBEC has been silent on the objectives of making so many amendments so frequently. In order to get the clear picture and deciphering the objectives, an attempt has been made here to analyse Draft PoTR of August, 2010, PoTR before amendment and PoTR after Notification No. 25/2011 together.
Amendments in Point of Taxation Rules- The Point of Taxation Rules (POTR) which shall come into effect from April 1, 2011 have been amended as under: The point of taxation in terms of Rule 3 of POTR would be the date of invoice or payment, whichever is earlier. In cases where invoice is not issued within 14 days of completion of the provision of service, the point of taxation shall be the date of such completion or receipt of payment whichever is earlier.
Levy of service tax on railway freight which was supposed to be effective from April 1 has been deferred once again by three more months to July 1, 2011- thanks to our Railways Minister. The historic amendment in levy of service tax by moving from cash basis of taxing services to accrual basis has come into force from April 1, 2011 against all hopes of it getting deferred by three months to July 2011, as announced by the Finance Minister. However , it has come into force but some flexibility has now been provided to taxpayers. All tax payers have been given an option to switch over to accrual basis either form April or July this year, thus offering three months of breathing time to adjust to such system, understand it and make suitable modification in software and accounting methods. It will become mandatory for all taxpayers from July, 2011. Under the new system, service tax would be payable on earliest happening of the three events- completion of provision of service or date of invoicing or date of payment. Till 31st March, it was date of payment which was reckoned to be the date on which service tax became due.
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
The Point of Taxation Rules, 2011 notified through Budget Notification No. 18/2011 ST dated 1st March, 2011 led to a number of issues which the Government assured would be looked into. Some relief has been extended and many of the areas of difficulty have been addressed. The important point is that the rules are applicable from 1.4.2011 itself unless the service provider opts to continue with the old system for 3 months. In that case there may be some accounting issues and requirement to maintain the parallel records.
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.
