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I have a query, if   any service becomes taxable or exemption is withdrawn  and  invoice  for the period prior to levy of service tax is  issued and payment is also received after levy of service tax, what will be the tax implication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

Point of Taxation determines taxability when services provided before levy but invoiced or paid after levy.
Whether a service provided prior to levy but invoiced or paid after levy is taxable depends on the point of taxation. Rule 5 of the Point of Taxation Rules provides that invoices and payments made before a service becomes taxable are not subject to tax; for continuous supplies, contractual payment dates, advances, and periodic billing determine separate points of taxation, and reverse-charge supplies use invoice or payment dates. CBEC guidance limits what constitutes completion enabling invoicing.