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Applicability of rate of Service tax for the taxable services provided prior to 1st June 2015, but billed and received payments at a later date – An analysis

Service Tax - By: - Indian Commerce - Dated:- 9-6-2015 Last Replied Date:- 10-6-2015 - Introduction: The Finance Bill, 2015 has received President s assent on 14th May 2015, increasing the rate of Service tax to 14% w.e.f. 01st June 2015 by amending .....

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to that, is conflicting. An overview of Rules and Act relates to the applicability of rate of Service tax A (i) Point of taxation Rules, 2011 Rule 4(a)(i) of Point of Taxation Rules, 2011, determination of point of taxation in case of change in rate .....

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r is earlier According to this rule, the invoice and the receipt of payment occurring after 1st June 2015, the rate of tax @ 14% should be applied, even though services was rendered prior to 1st June 2015. ii) Rule 6 of Service tax Rules, 1994 for Pa .....

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ists, it can be concluded that Point of Taxation Rules, 2011 are still relevant for determining the due date for payment of service tax. B) Section 67A was introduced subsequently by Finance Act, 2012, w.e.f 28th May 2012, reads as, The rate of servi .....

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or agreed to be provided. According to this Section, for the services completed prior to the change in the rate of tax (1st June 2015, in this case), the applicable rate of service tax shall be the one prevailing at the time when a taxable service is .....

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able service to be provided in the future, i.e. the rate in force on the date on which the advance amount is received. Conflict of application, between Point of Taxation Rules, 2011 and Section 67A Whether one has to charge Service tax at the rate pr .....

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le cannot override the Act and further in this case the said Act was introduced at a later date after the introduction of this Rule. Secondly, with effect from 1st July 2012, Rule 5B of the Service Tax Rules, 1994, which provides for determination of .....

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e said that for the determination of rate of tax, it should be only according to Section 67A (namely the rate of service tax in force or as applicable at the time when the taxable service has been provided or agreed to be provided.) This should be cl .....

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