Point of Taxation

[puneet virmani]

"A" registered under complex construction category as a builder/ promorter taking 75% abetment and paying service tax, not availing any cenvat credit. After enactment of Point of Taxation Rules, 2011 wht's the provision for promorter or builder to pay service tax as continuing service.

"B" registered under Works Contract Tax as contractor doing construction for "A" builder/ promorter paying service tax @4.12%, also not availing cenvat credit. After enactment of Point of Taxation Rules, 2011 wht's the provision for contractor as providing continuing service to pay service tax. 

AI Summary

Point of taxation for continuous supply: invoice date or payment receipt determines tax timing for construction and works contracts.
Certain services-commercial or industrial construction, construction of residential complexes, and works contract service-are treated as continuous supply irrespective of duration. For continuous supplies the point of taxation is the earlier of the invoice issuance date (or completion date if invoice not issued within fourteen days) or the date when payment is received to the extent of such payment. Periodic contractual events that require payment are treated as completion dates for taxation, and any advance received fixes the point of taxation on receipt.