Date of Payment for the KKC

[Sanjay Aggarwal]

Dear Sir,

We have provided a taxable service to our client in 15,Apr 2016 and accordingly raised the invoice for such service in 10, May 2016. The customer have made the payment through cheque dated 31.05.2016 and subsiquently such cheque is cleared on 04.06.2016.

In this case, what will be the date of payment and are we liable to pay KKC on such payment ?

AI Summary

Point of taxation rules determine KKC liability by invoice date, payment timing, and bank credit timing.
Applicability of KKC depends on Point of Taxation Rules that determine whether the date of invoice, date of payment or date of bank credit is the point of taxation. Rules provide distinct treatments for changes in effective tax rate and for services newly brought into the tax net, and a bank-credit rule treats date of credit as date of payment where payment instruments are credited after specified working days. Contributors disagreed on whether cheque clearance (bank credit) controls KKC liability when invoice and cheque date precede the levy.