service tax payable point

[Ganeshan Kalyani]

Dear Sir, As a service provider the bills are raised after the service is provided generally. For eg. if the service is provided in the month of June, 2014 the bill would be raised by service provider in June, 2014. Here the service tax liability for service provider occurs in the month of June 2014 or when the payment is received from service recipient. Kindly comment on this topic.

regards,

ganeshan

[MAHENDRABHAI DESAI]

Dear Ganeshan,

If value of taxable services provided in previous year 2013-2014 is less than ₹ 50 Lakhs, Service tax for FY 2014-15 is payable on receipt basis, if you are individual,proprietary firm/partnership firm or LLP, then it is required to be paid on quarterly basis.

[Radha Arun]

Invoice or payment, whichever is earlier, is the rule.

AI Summary

Point of taxation: invoice or payment rule governs service tax; small supplier relief permits receipt basis taxation with quarterly payment.
The default point of taxation is the invoice or payment, whichever is earlier. Eligible small suppliers-individuals, proprietors, partnerships or LLPs whose prior year taxable services fall below the small supplier threshold-may be required or permitted to account for service tax on a receipt basis and to file and pay on a quarterly basis. This contrasts the general rule by shifting liability to the time of payment for qualifying taxpayers.