Service tax on Previous year bills

[Sanjeev Sharma]

A chartered accountant firm having gross receipts more than Rs. 50 lacs is maintaining accounts on cash basis. Whether differential service tax ( 12.36% minus 10.3%) on bills raised upto 31^st March, 2012 and payments received subsequently in April, May, June and July, 2012,  is to be paid ??

[JAMES PG]

Please refer to the Circular No 158/9/2012 dated 8th Maywherein it is clearly mentioned that for payments made after 1st April,2012, ST to be discharged at 12.36% in respect of the 8 servcies which includes CA's also

Circular No. 158/9/ 2012 – ST

 

F.No 354/69/2012- TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Tax Research Unit

Room No 146, North Block, New Delhi

Dated : 8^th May 2012

To

Chief Commissioner of Customs and Central Excise (All)

Chief Commissioner of Central Excise & Service Tax (All)

Director General of Service Tax

Director General of Central Excise Intelligence

Director General of Audit

Commissioner of Customs and Central Excise (All)

Commissioner of Central Excise and Service Tax (All)

Commissioner of Service Tax (All)

 

Madam/Sir,

Subject: - Clarification on Rate of Tax - regarding.

The rate of service tax has been restored to 12% w.e.f. 1^st April 2012.  Representations have been received requesting clarification on the rate of tax applicable wherein invoices were raised before 1^st April 2012 and the payments shall be after 1^st April 2012. Clarification has been requested in case of the 8 specified services provided by individuals or proprietary firms or partnership firms, to which Rule 7 of Point of Taxation Rules 2011 was applicable and services on which tax is paid under reverse charge.

1. The rate of service tax prevalent on the date when the point of taxation occurs is rate of service tax applicable on any taxable service. In case of the 8 specified services and services wherein tax is required to be paid on reverse charge by the service receiver the point of taxation is the date of payment. Circular No 154/5/2012 – ST dated 28^th March 2012 has also clarified the same. Thus in case of such 8 specified services provided by individuals or proprietary firms or partnership firms and in case of services wherein tax is required to be paid on reverse charge by the service receiver, if the payment is received or made, as the case maybe, on or after 1^st April 2012, the service tax needs to be paid @12%.
2. The invoices issued before 1^st April 2012 may reflect the previous rate of tax (10% and cess). In case of need, supplementary invoices may be issued to reflect the new rate of tax (12% and cess) and recover the differential amount. In case of reverse charge the service receiver pays the tax and takes the credit on the basis of the tax payment challan. Cenvat credit can be availed on such supplementary invoices and tax payment challans, subject to other restrictions and conditions as provided in the Cenvat Credit Rule, 2004.
3. Trade Notice/Public Notice may be issued to the field formations accordingly.
4. Please acknowledge the receipt of this circular. Hindi version to follow.

 

(Dr. Shobhit Jain)

OSD, TRU

Fax: 011-23093037

[YAGAY andSUN]

This has been stayed by High court.

[JAMES PG]

 

The stay is granted  for the corecive recovery  of the diffrential service tax  against the appeal filed by Delhi Chartered Accountants Society  on 28th July,12. Can it be made applicable to all service provioders across the country until Board issues necessary amendments?

[YAGAY andSUN]

27.07.2012 – Delhi High Court today Stays collection of differential demand of service tax of 2% on services provided and invoices issued prior to 01.04.2012 for which payment received after 31.03.2012 on following 8 categories of professionals services

· Architect

· Interior Decorator

· Cost Accountant

. Chartered Accountant

· Company Secretary

· Scientific or Technical Consultancy

· Legal Service

· Consulting engineer services

High court was hearing a petition filed by Delhi Chartered Accountants Society.

Further, for seeking the relief, one has to file a writ petition in jurisdictional High Court or clarification from the board is required.

AI Summary

Service Tax Rate Dispute: Delhi Court Stays Higher Rate on Pre-April 2012 Invoices Paid Afterward A chartered accountant firm inquired about the applicable service tax rate on payments received after April 1, 2012, for invoices issued before that date. Initially, the service tax rate was increased to 12.36% from 10.3% starting April 1, 2012, as per a government circular. However, the Delhi High Court stayed the collection of the differential service tax on certain professional services, including those provided by chartered accountants, where invoices were issued before April 1, 2012, but payments were received afterward. The stay was in response to a petition by the Delhi Chartered Accountants Society, suggesting that further clarification or legal action might be necessary for similar cases.