Service tax rate follows the date of service rendition, not payment realisation, for the relevant period.

For service tax on services rendered in March 2008, the applicable rate was held to be the rate in force when the taxable service was actually rendered, not the later rate in force when payment was realised. The Tribunal followed its earlier view on the same issue and rejected the department's reliance on a subsequent change in the point of taxation for the relevant period. On that basis, the 4% rate was held inapplicable, and the assessee was treated as having correctly discharged service tax at the earlier rate.

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Issues: Whether service tax for the services rendered in March 2008 was payable at 2% or 4%.

Analysis: The dispute turned on the relevant taxable event for service tax and the applicable rate. The Tribunal followed its earlier decision on the same issue and accepted the view that the applicable rate is the rate in force when the taxable service is rendered, not the rate applicable when payment is realized. The departmental reliance on the later point of taxation change was not accepted for the period in question.

Conclusion: The higher rate of 4% was not applicable to the services in question, and the Commissioner (Appeals) was in holding that the respondent had correctly discharged service tax at the earlier rate.

Ratio Decidendi: For service tax, the applicable rate is determined by the date of rendition of the taxable service, as the taxable event occurs on rendering of service.

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