Service Tax

[MITSUI PRIME ADVANCED]

Dear Sir,

 

Please tell me about service tax related to Manpower Supply services, at presently bills received from service provider on 07.09.2012 period from 01.08.2012 to 31.08.2012 ,

bill book in our SAP ( Financial books of accounts ) on 11.09.2012

As per service tax act servic tax payable on 06.09.2012

Please tell me which date consider for service tax payment as per allied point of taxation rule 2011.

 

Regards

Arjun Sachdeva

[Vijay kumar]

In terms of Rule 7 of Point of Taxation Rules,2011, for service recivers, the date of payment is the point of taxation. Accordingly, the bill date or billing period does not matter and u need not pay service tax on 6.9.2012. You are liable to pay the tax by 6th of the month succeeding the month in which the payment is made by you to the service provider. However, if such payment is beyond six months from the bill date, this Rule does not exist and you have to go by rule 3 ibid.

AI Summary

Point of taxation: payment date determines service tax liability; billing date irrelevant unless delayed beyond a six month period.
For service receivers the operative point of taxation is the date of payment to the service provider; the bill date or billing period does not determine tax timing. The recipient's liability to remit service tax follows the timing rules tied to that payment. If payment is delayed beyond a substantial interval from the bill date, the payment date rule does not apply and an alternative timing rule governs the point of taxation.