Service tax rate applies on the date of discharge after billing, not the period when services were rendered.

Service tax liability was determined by the rate in force when the consolidated bill was raised and the tax was discharged, not by the period during which the services were rendered. Where services were rendered in 2008-09 but billing and discharge occurred on 31.03.2009, the reduced 10% rate under Notification No. 8/2009-ST applied. In the absence of any contrary statutory provision tying tax rate to the service period, the applicable rate follows the date of payment after billing. The demand based on 12% was therefore unsustainable.

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Issues: Whether service tax was payable at 12% on the basis of the period during which services were rendered, or at 10% on the basis of the rate in force when the consolidated bill was raised and tax was discharged.

Analysis: The services were rendered during 2008-09, but the consolidated bill was raised on 31.03.2009, when the reduced rate of 10% was in force by virtue of Notification No. 8/2009-ST dated 24.02.2009. The dispute turned on whether the tax rate was to be determined with reference to the service period or the date when the liability was discharged. The Tribunal held that there was no provision under the service tax law making the rate depend on the period of rendition of services, and that the applicable rate was the rate effective on the date of payment after billing.

Conclusion: The appellant was liable to pay service tax at 10%, and the demand based on 12% was unsustainable.

Ratio Decidendi: In the absence of a contrary statutory provision, service tax is payable at the rate in force on the date the liability is discharged, not with reference to the period during which the services were rendered.

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