APPLICABILITY OF REVERSE CHARGE MACHANISM

[MOHAMED RAFIQ]

IS THE REVERSE CHARGE MACHANISM APPLICABLE ON SERVICE PROVIDED BEFORE 01/07/2012 BUT BILL RAISED AND PAYMENT MADE AFTER 30/06/2012?

[JAMES PG]

Please refer to the clarification given in the Education Guide of Service Tax published by CBEC in this regard:

 

10.1.7 Is the reverse charge applicable on services provided and complete before 1.7.2012 though payments were made after 1.7.2012? For any service whose point of taxation has been determined and whole liability affixed before 1.7.2012 the new provisions will not apply. Merely because payments are being made after 1.7.2012 will not add any additional liability on the service receiver in respect of such services.

[YAGAY andSUN]

For any service whose point of taxation has been determined and whole liability affixed before 1.7.2012 the new provisions will not apply. Merely because payments are being made after 1.7.2012 will not add any additional liability on the service receiver in respect of such services.

AI Summary

Reverse Charge Mechanism: No Additional Liability for Services Taxed Before July 1, 2012, Even if Paid Later. A query was raised about the applicability of the reverse charge mechanism on services provided before July 1, 2012, but billed and paid after June 30, 2012. Two respondents clarified that if the point of taxation and liability were determined before July 1, 2012, the new provisions do not apply. Payments made after this date do not impose additional liability on the service receiver for such services. This clarification aligns with the guidelines in the Education Guide of Service Tax by CBEC.