Rate of service tax

[JOSHIL JAIN]

One of my client is export oriented ltd. company. It pays commission to overseas agents at the end of year on sales invoices raised during the whole financial year. Now i want to know at what rate it should deposit service tax ( under import of services ) on sales invoices raised before 24.02.2009 - (a) if invoices of commission from foreign agents is received in month of March 2009 ( for invoices raised before 24.02.2009) and commision is paid in April 2009. 9b) if invoices from foreign agetns is received before 24.02.2009 but the commission is paid after 24.02.2009 Joshil Jain

[madhavvan n]

the applicable rate of service tax is the rate prevailing on the date of rendering of service even though invoicing may be done at a later date service tax rate applicable is 12.36% for commission to be paid for the period april 09 to january 09 since the services are already rendered for this period for the month of february it has to be split up for the period from 1st feb 09 to 23rd feb09 rate is 12.36% 24th feb09 to march 31st 09 rate is 10.30%

AI Summary

Rate prevailing on date of rendering of service determines service tax, even if invoiced later; apportion by service period. The applicable service tax is the rate prevailing on the date of rendering of service, regardless of later invoicing. Commission for the earlier service period is taxable at 12.36%. Where services span the rate-change date, tax liability must be apportioned: 1-23 February at 12.36% and 24 February-31 March at 10.30%.