Taxability of services

[NEERAJ KUMAR, RANCHI]

Dear sirs,

I have a query, if   any service becomes taxable or exemption is withdrawn  and  invoice  for the period prior to levy of service tax is  issued and payment is also received after levy of service tax, what will be the tax implication on such billing. Please note service has been provided prior to the date when it became taxable and invoice is issued after it became taxable also payment is made thereafter.

AI Summary

Service Tax Not Applicable if Provided Before Taxable Status, Even with Later Invoicing and Payment per Rule 5. A participant from Ranchi inquired about the tax implications when a service becomes taxable after it has been provided, but the invoice is issued and payment received post-tax implementation. The respondent clarified that, according to the Point of Taxation Rules, service tax is not applicable if the service was provided before it became taxable, even if invoicing and payment occur later. Rule 5 of the Point of Taxation Rules, 2011, and subsequent amendments were cited, emphasizing that the timing of invoicing and payment is crucial in determining tax liability for newly taxable services.