Clarification - rate of service tax

[Atul Khandelwal]

We are a Construction company, the main profile is to execute works contract and management, maintainence & repairs service. Now the problem is that we are giving service to one of our client in jan-09 . The payment of that service we received in oct 2009. Our client made us a gross payment with 10.3 % of service tax instead of the that time existing rate of 12.36 %. I submit all the notification,but he is not ready to under stand. Pls suggest by which case or circuler I convince our client.

[Mukesh Kumar]

Service tax rate is applicable corresponding to the period in which services have been provided. If the rate of service tax (increase / decrease) change after the date of provision of service, that can not effect the previous situation. Therefore the stand taken by your client is not warranted at all. Even if there are certain good decisions on this issue. You may find those cases in service tax case laws in this site.

AI Summary

Construction Company Disputes Client's Service Tax Payment; Correct Rate Was 12.36%, Not 10.3%, in January 2009. A construction company is facing an issue where a client paid a service tax of 10.3% for services provided in January 2009, instead of the applicable 12.36% rate at that time. Despite submitting notifications, the client remains unconvinced. A respondent advises that the applicable service tax rate corresponds to when the services were provided, not when payment is received. Therefore, the client's stance is incorrect, and the company should refer to relevant service tax case laws to support their position.