Service tax rate depends on the date of service rendered, not the date of payment, affirming the charging event principle.

Service tax was held payable at the rate prevailing when the service was rendered, not the rate in force on the date of payment. The Commissioner (Appeals) applied the charging provisions and treated the taxable event as linked to provision of service, rejecting the Revenue's reliance on Rule 6 of the Service Tax Rules, 2004. The Tribunal noted that its earlier decisions had already settled that the applicable rate is determined by the date of rendering of the service. The Revenue's challenge therefore failed.

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Issues: (i) Whether service tax was payable at the rate prevailing on the date of rendering the service or at the rate prevailing on the date of payment.

Analysis: The rate of service tax was enhanced by the Finance Act, 2004 with effect from 10.09.2004, and Education Cess was also made leviable, giving an effective rate of 10.2%. The dispute turned on the relevant date for applying the rate. The Commissioner (Appeals) held, on a combined reading of the charging provisions, that the taxable event was linked to the time of providing service and not merely to the date of payment. The Revenue's reliance on Rule 6 of the Service Tax Rules, 2004 was not accepted, as the Tribunal decisions relied upon below had already settled that the applicable rate is the rate prevailing when the service is rendered.

Conclusion: The applicable service tax rate was the rate prevailing on the date of rendering of the service, not the date of payment, and the Revenue's challenge failed.

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