Draft Point of Taxation (for Services Provided or Received in India) Rules

Point of taxation rules link service tax to provision, invoice issuance or payment, determining applicable tax timing and rate.

Point of taxation is fixed at the earliest of three events: provision of service, issuance of invoice, or receipt of payment. Advances (other than interest free refundable deposits) trigger tax on receipt. For continuous supplies, timing follows a sequential test: contractual payment due date, event/milestone completion, then invoice or payment (earlier). Rate changes are governed by rules that generally treat the earlier of invoice or payment as the point of taxation, with a 30 day exception for invoices issued before a rate change.