Raising of bills

[Guest]

As per new service tax rules tax is to be deposited on accrual basis i.e. on raising of the bill.

Now what is the time limit for raising a bill after rendering the service.

[Reshma kochar]

Hi Manohar,

As per provisions of Point of Taxation Rules 2011,  with effect from 1st july and onwards, payment of service tax by a service provider to the Government will be on a accrual basis.

In the case of single service, the point of taxation will be as follows-

1. Date of invoice or payment, whichever is earlier (if invoice is issued within 14 days of completion of service).

2. Date of completion of service or payment, whichever is earlier (if invoice is not issued within 14 days of completion of service).

 

that means invoice have to be issued within 14 days of completion of service, otherwise service tax has to be paid on the day of  completion of service instead of date of invoice.

Thanks

Reshma.

AI Summary

Accrual basis taxation requires invoice issuance within the statutory period or tax triggers on service completion. Payment of service tax operates on an accrual basis under the Point of Taxation Rules: where an invoice for a single service is issued within 14 days of completion, tax is due on the earlier of invoice date or payment; if no invoice is issued within 14 days, tax is due on the earlier of completion date or payment.