CBEC specifies 'point of taxation' for change in reverse charge liability

[SANDESH SHINDE]

Dear Sir,

Please explain in simple way regarding CBEC specifies 'point of taxation' for change in reverse charge liability ,Thanks & Regards.

POINT OF TAXATION (SECOND AMENDMENT) RULES, 2016 - AMENDMENT IN RULE 7

NOTIFICATION NO.21/2016-ST, DATED 30-3-2016.

AI Summary

Clarification on Reverse Charge Liability Under Point of Taxation (Second Amendment) Rules, 2016: Invoice Date Determines Tax Rate A discussion on a forum addresses the Central Board of Excise and Customs (CBEC) specifying the 'point of taxation' concerning changes in reverse charge liability, as per the Point of Taxation (Second Amendment) Rules, 2016. A participant explains that under the reverse charge mechanism (RCM), the service tax liability is transferred to the service receiver, either fully or partially. If there is a change in service tax rates or liability sharing, the point of taxation is determined by the invoice issuance date. An example illustrates that services provided and invoiced before a rate change are taxed at the old rate, even if payment is received later. Another participant appreciates the explanation.