TaxTMI 
TaxTMI 
13 Mar 2015 
BUDGET - VII (POT Rules)
Effect of POT Rules, 2011 on change in rate of Service Tax.
Although this effect is to be reckoned from the effective date as notified by the Central Government.
Sr. No. | Taxable Service Provided | Issue of Invoice | Receipt of Payment | Point of Tax | Rate Applicable |
1. | Before | After | After | Earlier of date of payment/issue of invoice | 14% |
2. | Before | Before | After | Date of issue of invoice | 12.36% |
3. | Before | After | Before | Date of payment | 12.36% |
4. | After | Before | After | Date of Payment | 14% |
5. | After | Before | Before | Earlier of date of payment / Issue of Invoice | 12.36% |
6. | After | After | Before | Date of issue of Invoice | 14% |
Note:-
- The proposed levy of Swachh Bharat Cess @ 2% is also in the nature of service tax as narrated in clause 117 of the Finance Bill 2015. Thus POT rules shall equally apply to it in the same manner as mentioned above.
- The words ‘Before’ and ‘After’ in the above table mean before/after the date to be notified.
- In case of Sr. No. 3 and Sr. No. 5 above, if the payment is not credited in the bank within 4 working days from the date when there is change in effective rate of tax, the new rate of 14% would apply. (Rule 2A of POT Rules,2011)
- The rate of 12.36% is inclusive of Education Cess and SHE Cess.
CA Akash Phophalia
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