1. CERTIFICATE COURSE ON INDIRECT TAXES – SERVICE TAX by g. natarajan advocate, swamy associates

2. POINT OF TAXATION RULES  Introduced vide Notification 18/2011 ST Dt. 01.03.2011.  Effective from 01.04.2011 / 01.07.2011.  Good Bye to realisation based Service Tax payment – Rule 6 of ST Rules, 1994.  Not applicable to Individuals, Proprietary concerns & Partnership firms of - Chartered Accountants. - Cost Accountants. - Company Secretaries. - Architects. - Interior Decorators. - Legal services. - Scientific and Technical Consultancy services. - Consulting Engineers.

3. Rule 6 of the Service Tax Rules 6. Payment of service tax. The service tax shall be paid to the credit of the Central Government, (i)by the 6 th day of the month, if the duty is deposited electronically through internet banking; and (ii) by the 5 th day of the month, in any other case, Immediately following the calender month in which the service is deemed to be provided as per the rule framed in this regard. Rule 2(e) of the Point of Taxation Rules “Point of taxation means the point in time when a service shall be deemed to have been provided”

4. Rule 3 of the Point of Taxation Rules 3. Determination of point of taxation.- For the purposes of these rules, unless otherwise provided, 'point of taxation' shall be,- (a) the time when the invoice for the service provided or to be provided is issued: Provided that where the invoice is not issued within fourteen days of the completion of the provision of the service, the point of taxation shall be date of such completion. (b) in a case, where the person providing the service, receives a payment before the time specified in clause (a), the time, when he receives such payment, to the extent of such payment. Explanation.- For the purpose of this rule, wherever any advance by whatever name known, is received by the service provider towards the provision of taxable service, the point of taxation shall be the date of receipt of each such advance.”.

5. Provision of Service or Issue of Invoice or Receipt of Payment – whichever is earlier – Is the point of taxation. S.No. Date on which service was provided Date on which invoice was issued Date on which payment was received Point of Taxation 110 th July 201115 th July 201115 th August 201115 th July 2011 210 th July 201115 th August 2011 15 th September 2011 10 th July 2011 310 th August 20115 th July 201115 th August 20115 th July2011 410 th September 20115 th September 20115 th August 2011

6. MonthCustomerWhat I did?ST to be paid on July 2011XProvided service05.08.2011 July 2011YReceived advance05.08.2011 July 2011ZIssued Invoice05.08.2011 Aug 2011XIssued InvoiceAlready paid Aug 2011YProvided serviceAlready paid Aug 2011ZReceived PaymentAlready paid Aug 2011XReceived PaymentAlready paid Aug 2011YIssued InvoiceAlready paid Aug 2011ZProvided serviceAlready paid Aug 2011AReceived advance05.09.2011 Aug 2011BProvided service05.09.2011 Aug 2011CIssued Invoice05.09.2011

7. CONTINUOUS SUPPLY OF SERVICE  “continuous supply of service” means any service which is provided, or to be provided continuously, under a contract, for a period exceeding three months & services specifically notified, viz., commercial or industrial construction, construction of complex, telecommunication, internet telecommunication & works contract.  Explanation 1.– For the purpose of this rule, where the provision of the whole or part of the service is determined periodically on the completion of an event in terms of a contract, which requires the service receiver to make any payment to service provider, the date of completion of each such event as specified in the contract shall be deemed to be the date of completion of provision of service.  Circular No. 144/13/2011 Dt. 18.07.2011.

8. SPECIAL PROVISIONS  For export of services, POT shall be the date of receiving payment. (But payment should be received within the time prescribed by RBI).  Reverse Charge Liabilities – Date of making payment. (But payment should be made within 6 months)  Associated enterprises – date of credit in books / date of payment whichever is earlier.  IPR Services – when payment is made / received.

9. MISCELLANEOUS  Adjustment of ST paid, if service is not provided (wholly or partially) or the value is renegotiated, subject to refund / credit note in favour of the customer {Rule 6(3) of ST Rules, 1994}.  No relief for Bad Debts.

10. POT IN CASE OF CHANGE OF ST RATES

11. Issue of Invoice Receipt of Payment POT After change of rateAfter Change of rate Date of Invoice or Date of payment, whichever is earlier – New Rate will apply Rule 4 (a) (i) Before change of rate After Change of rate Date of Invoice – Old Rate will apply Rule 4 (a) (ii) After Change of RateBefore Change of Rate Date of payment – Old Rate will apply Rule 4 (a) (iii) Service provided before change of rate

12. Issue of Invoice Receipt of Payment POT Before change of rate After Change of rate Date of Payment– New Rate will apply Rule 4 (b) (i) Before change of rate Before Change of rate Date of Invoice or Date of payment whichever is earlier– Old Rate will apply Rule 4 (b) (ii) After Change of RateBefore Change of Rate Date of Invoice – New Rate will apply Rule 4 (b) (iii) Service provided after change of rate

13. Applicability of change of rate – Service provided before change of rate. (Assuming the service provider has opted for POT from 1 st April 2011 and the rate of tax changed on 1 st July 2011) Date of provision of service Date of Invoice Date of receipt of payment Point of taxation and applicable rate. June 20111 st July 20111 st August 2011 1 st July 2011 – New rate June 20111 st August 20111 st July 2011 1 st July 2011 – New rate June 201130 th June 201115 th July 2011 30 th June 2011 – Old Rate June 201115 th July 201130 th June 201130 th June 2011 – Old Rate

14. Applicability of change of rate – Service provided after change of rate. (Assuming the service provider has opted for POT from 1 st April 2011 And the rate of tax changed on 1 st July 2011) Date of provision of service Date of Invoice Date of receipt of payment Point of taxation and applicable rate. July 201130t June 20111 st August 2011 1 st August 2011 – New rate July 20111 st May 201130 th June 2011 1 st May 2011 – Old rate July 201130 th June 20111 st May 2011 1 st May 2011 – Old Rate July 201115 th July 201130 th June 201115 th July 2011 – New Rate

15. Thank you g. natarajan 93400 54477 mail@swamyassociates.com