Service tax rate is increase to 14 % w.e.f. 1st June 2015. In this regard the provider of service must keep in mind the point of taxation rules in order to calculate the correct rate of tax. For the purpose of simplicity one can go through below mentioned point To understand the impact of change in rate of service tax.
1. Service Provision is complete till 31.05.2015 and Invoice raised till 31.05.2015 but Payment received on or after 01.06.2015- 12.36% applicable.
2. Service complete till 31.05.2015, Invoice raised on or after 01.06.2015 but Payment is received till 31.05.2015 - 12.36%
3. Service Provision complete till 31.05.2015 and Invoice raised on or after 01.06.2015 and Payment also received after 01.06.2015- 14%
4. Invoice raised till 31.05.2015 in advance and some part of total consideration has been paid till 31.05.2015 but Service Provision is being done on or after 01.06.2015 -12.36% for such part payment, 14% for balance to be recd.
5. Entire consideration received till 31.05.2015 but no invoice raised till 31.05.2015 and no service provided -14%
6. Even if entire service has been provided on or after 01.06.2015 but both payment as well as invoicing has been done till 31.05.2015 then -12.36%
Regards
CA Anand Mutha
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