<h1>CESTAT Rules in Favor of Company: Service Tax Rate Based on Service Provision Date, Not Payment Date.</h1> In a case involving a hire purchase agreement, the company involved disputed a demand for an increased service tax rate from 5% to 8% imposed by the tax authorities. The agreement was made before the rate increase on May 14, 2003, but the demand was for amounts collected after May 14, 2008. The company argued that service tax should apply at the time services are provided, not when payments are received. The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) agreed with the company, setting aside the demand by referencing a 2001 circular clarifying service tax application on hire purchase transactions.