point of taxation ca services

[satbir singhwahi]

Chartered Accountant services, the audit completed on 30.09.2015, the invoice is issued on 30.09.2015. But payment is received on 16.11.2015 . Whether rate of service tax be 14% or 14.5% , The books of account maintained on Cash basis of accounting .

[DR.MARIAPPAN GOVINDARAJAN]

The service tax rate is to be decided by any of two of the following:

1. Period of service provided; 2. Date of invoice issued; 3. Consideration received.

In your case the audit was completed on 30.09.2015; the invoice was issued on 30.09.2015. Payment will be received only after 15.11.2015 i.e., the date of implementation of Swachh Bharat Cess.

The date of completion of audit and the invoice issue are before 15.11.2015 the rate of tax applicable in your case is only 14%.

[Ganeshan Kalyani]

Yes 14% is applicable as both service provided and invoice raised is before change introduction of swachh bharat cess.

[Mahir S]

Sir,

For services provided and invoices issued before the imposition of Swachh Bharat Cess but payment received after imposition of Swachh Bharat Cess, then in such cases the rate of service tax shall be 14 %, as explained above.

[YAGAY andSUN]

The CBEC has provided clarifications in this regard.

	Applicability of Cess
Payment received prior to November 15, 2015 and Invoice issued prior to November 15, 2015	No
Payment received prior to November 15, 2015 and Invoice issued within 14 days of levy (i.e. before November 29, 2015)	No
Payment received prior to November 15, 2015, services provided on or after November 15, 2015 and invoice issued after November 29, 2015 (after 14 days of levy)	Yes
Payment received, services provided and invoice issued on or after November 15, 2015	Yes

[Ganeshan Kalyani]

Yes Rule 5 of point of taxation rule is applicable as SBC is a new levy.

AI Summary

Point of taxation: invoice and service dates govern cess applicability, not later receipt of payment. The applicable service tax rate is determined by reference to any two of three events: service provision date, invoice issuance date, and receipt of consideration. If both service completion and invoice issuance occur before the levy of the Swachh Bharat Cess, the pre-cess rate applies even if payment is received after the levy. Administrative clarification and Rule 5 treat the cess as a new levy, with limited exceptions where invoice timing around the levy may affect applicability.