Provisional Assessement

[Anish Goyal]

A Company is engaged in providing manpower supply service to various corporate. The invoice can be generated by him only after receiving attendance sheet from the service receiver. Receiving attendance sheet some times takes 3 to 4 months from the date of completion of service but as per Service Tax Rules,1994 invoice has to be raised within 30 days of date of completion of service.

In this case, the Department can ask for interest on late billing and payment of service tax. So to avoid interest whether provisional assessment can be done under Rule 6(4) of the Service Tax Rules, 1994.

[DR.MARIAPPAN GOVINDARAJAN]

The service tax is payable on or before 6th of the following month. If the assessee could not able to confirm the service tax liability then he may inform the same to the Range Superintendent and permit for him to make the payment provisionally. The Superintendent will inform the payment to be made, on the basis of the past payments made by you. You have to pay the service tax as stipulated by the Superintendent. On getting the final figures of service tax you have to request to assess finally. On final assessment if any amount is in excess the same will be refunded. If any further amount is payable the same is paid along with interest from the date of due to the date of payment.

[Ganeshan Kalyani]

As an alternative you should request the receiver to submit the attendance report within time. I guess attendance are updated at any point of time. it does not require any working or changes. So the receiver should be able to provide the report within time.

[Anish Goyal]

While searching about this issue I got this circular today. I think this circular is relevant for the case:

Circular No. 144/13/ 2011 – ST

F.No.354/93/2011-TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Tax Research Unit

North Block, New Delhi

18^th July, 2011

To

Chief Commissioners of Central Excise and Service Tax (All),

Director General (Service Tax),

Director General (Central Excise Intelligence),

Director General (Audit),

Commissioners of Service Tax (All),

Commissioners of Central Excise and Service Tax (All).

Madam/Sir,

Subject: - Clarification on “Completion of service”- regarding.

Representations requesting clarification on “completion of service” as provided under the Point of Taxation Rules, 2011 and Service Tax Rules, 1994 have been received from certain sections of service providers that in many situations it is not possible to issue invoices within 14 days of the completion of the service since the exact date of completion of service is difficult to identify. Instances have been given where after the task of providing the service may be physically accomplished, but certain other formalities are required to be completed from the client’s end before an invoice can be issued.

2. These representations have been examined. The Service Tax Rules, 1994 require that invoice should be issued within a period of 14 days from the completion of the taxable service. The invoice needs to indicate interalia the value of service so completed. Thus it is important to identify the service so completed. This would include not only the physical part of providing the service but also the completion of all other auxiliary activities that enable the service provider to be in a position to issue the invoice. Such auxiliary activities could include activities like measurement, quality testing etc which may be essential pre-requisites for identification of completion of service. The test for the determination whether a service has been completed would be the completion of all the related activities that place the service provider in a situation to be able to issue an invoice. However such activities do not include flimsy or irrelevant grounds for delay in issuance of invoice.

The above interpretation also applies to determination of the date of completion of provision of service in case of “continuous supply of service”.

3. Trade Notice/Public Notice may be issued to the field formations accordingly.

4. Please acknowledge the receipt of this circular. Hindi version to follow.

(Samar Nanda)

Under Secretary, TRU

[Ganeshan Kalyani]

From the circular it is inferred that some services which need ancillary activity to determine the working to raise invoice therefore concession is right for those service. But here for attendance there is no ancillary working to be carried to determine consideration. Hence applicability of the Circular in your case is less.

[Ganeshan Kalyani]

Hope your query is resolved.

AI Summary

Completion of service rules determine invoice timing; provisional assessment permits provisional tax payment pending final liability. Provisional payment under Rule 6(4) allows a taxpayer to notify the Range Superintendent when exact service tax liability cannot be determined; the Superintendent may require provisional payments based on past payments with final assessment and refund or additional payment (with interest) later. The Point of Taxation guidance treats completion as including necessary auxiliary activities enabling invoicing, but ordinary attendance reports are unlikely to qualify as such, limiting reliance on that concession for delayed billing.