Rate of Tax

[Harsh Jindal]

What wil be the rate of tax if services are provided before 1 july and payment is received after 1 july?

[YAGAY andSUN]

The Department has clarified this matter and tax will be 12.36%.

[JAMES PG]

But there is a stay on the extra collection of 2.06% by Delhi High Court

[YAGAY andSUN]

Yes, but on professionals like, CA, ICWA and CS.

[Harsh Jindal]

It depends on situation. There are three events in a service:
1. Date of Invoice
2. Date of receiving payment
3. Date of providing service
If, two events are held before 1 july, then the rate will be 10.30% and if the two events are held after 1 July, then the rate will be 12.36%.

[YAGAY andSUN]

Very true....

AI Summary

Service tax timing rule: timing of invoice, payment or provision determines applicable rate; limited stay applies for professionals. The applicable service tax rate is determined by the timing of invoice issuance, payment receipt and provision of service under a Two-Event Test: if two of these events occur before the effective date the earlier rate applies, and if two occur after the effective date the later rate applies. The department clarified application of the later rate where two events fall after the effective date, while a judicial stay on the additional component has been recorded for certain professionals.