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Author Topic: Applicability of 14% Rate of Service Tax effective 1 June 2015  (Read 1154 times)

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Offline TechShristi

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Dear All,

Just to simply understand  the details given in attached file.

Firstly, Divide the service given into 2 parts :


1. Service Given before rate change
2. Service given after rate change


Now we will determine the applicability of rate of of service tax  as per Point of Taxation rule only (which is a new rule made by CBEC in 2011). Just for your knowledge : earlier we determine rate of tax basis Section 67 A  which says 'Rate in force on date when service is actually provided or agreed to be provided' but we apply POT rule for determine rate of tax).



What is POT rules
POT means the "point of time when service deemed to be provided".
Service deemed to be provided means when "Invoice issued or payment made which ever is earlier". (Subject to condition if Invoice not issued within 30 days of service completion than date of service completion is taken)



> Now we will determine the applicable rate in cases when "Service given before rate change "








> Determination of rate of tax in cases when " Service given after rate change "


( A short trick to determine applicable rate of rate (in cases where service provided after rate change) is where 2 things fall on one side... for eg. service provided after rate change and payment made after rate change fall on one side than 14 % will become applicable[see in 2nd case] ).





Thanks to our moderator @ Amit Jolly for such nice article.




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