Service tax payment on works contract under reverse charge method.

[vinay wakde]

Kindly clarify if the payment against the Bills/invoices under works contract is made during July,12  for the services received in June,12. In this case, whether we have to pay 50% service tax under reverse charge method? or we have to pay service tax as per old provisions. 

Regards,

VINAY

 

AI Summary

Reverse charge applicability: services with taxation point fixed before change remain governed by prior liability rules despite later payments.
Where the point of taxation and whole tax liability for services were determined and affixed before the change in law, the reverse charge mechanism does not apply and later payments do not create additional liability; invoice timing and accounting within the prescribed period are relevant for demonstrating that liability was fixed under the prior provisions.