Budget VII- Effect of POT Rules 2011 on change in Service Tax Rate

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..... Budget VII- Effect of POT Rules 2011 on change in Service Tax Rate
By: - CA Akash Phophalia
Service Tax
Dated:- 13-3-2015

BUDGET - VII (POT Rules) Effect of POT Rules, 2011 on change in rate of Service Tax. Although this effect is to be reckoned from the effective date as notified by the Central Government. Sr. No. Taxable Service Provided Issue of Invoice Receipt of Payment .....

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..... Point of Tax Rate Applicable 1. Before After After Earlier of date of payment/issue of invoice 14% 2. Before Before After Date of issue of invoice 12.36% 3. Before After Before Date of payment 12.36% 4. After Before After Date of Payment 14% 5. After Before Before Earlier of date of payment / Issue of Invoice 12.36% 6. After After Before Date of issue of Invoic .....

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..... e 14% Note:- * The proposed levy of Swachh Bharat Cess @ 2% is also in the nature of service tax as narrated in clause 117 of the Finance Bill 2015. Thus POT rules shall equally apply to it in the same manner as mentioned above. * The words 'Before' and 'After' in the above table mean before/after the date to be notified. * In case of Sr. No. 3 and Sr. No. 5 above, if the payment is not cr .....

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..... edited in the bank within 4 working days from the date when there is change in effective rate of tax, the new rate of 14% would apply. (Rule 2A of POT Rules,2011) * The rate of 12.36% is inclusive of Education Cess and SHE Cess. CA Akash Phophalia 9799569294 [email protected] Office No 3 Second Floor Amrit Kalash Residency Road Near Bombay Motor Circle Jodhpur - 342001 Rajast .....

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..... han Reply By Vinay Kunte as = Sir, My view is as under w.r.t. Point No. 6 of the Table: At Point No. 6 of the table the Rate of Service Tax will have to the Date earlier of the Invoice Issued or the Payment received. As the Payment is received in form of an Advance, the Service Tax will have to be paid @ 12.36% before the budgetary changes take effect. Please correct me if I ma wrong .....

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..... which will enrich my knowledge as well. Dated: 14-3-2015 Reply By CA Akash Phophalia as = Respected Vinay Ji Thanks for showing interest in my article. Kindly refer Rule 4(b)(iii) of Point of Taxation Rules, 2011. This rule guides point no 6. Humble regards Dated: 14-3-2015
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