I fail to understand as to why provision for 'continuous service' as defined u/R 2 of POT is not reflected in POTrule 7 read with 10 for reverse charge. Interestingly, rule 7 does not override rule 2. But Notification 28/2011-ST (amended) prescribes only telecom and work contract services as 'continuous service'. Question is then : What will happen to other continuous services like say sponsorship spanning over a year or so where tax liability cannot be ascertained without measuring performance ? Is MF's circular 144/13/2011-ST relevant for such service ?
Debtosh Dey, M.Sc (Engg), FIE, C. Engg (I), FCMA, FCS, LL.B.
Query on 'Continuous Service' Provision in POT Rules: Rule 2 vs. Rule 7 Reverse Charge Mechanism A forum participant raised a query about the provision for 'continuous service' under Rule 2 of the Point of Taxation (POT) rules, questioning why it is not reflected in Rule 7 when it comes to reverse charge mechanisms. The participant noted that Notification 28/2011-ST only categorizes telecom and work contract services as 'continuous services' and inquired about the tax implications for other services like sponsorships that span over a year. Another participant responded, suggesting that the Ministry of Finance's circular No.144/13/2011-ST is relevant for addressing such continuous services. (AI Summary)
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