At
present Rule 7 of the Point of Taxation Rules 2011 has overriding effect over
all rules.
However
in the budget 2014-15 an amendment has been effected which will be effective
from 1st day of October 2014. Under service tax Return is filed on
half yearly basis i.e. 1st April to 30th Sep and 1st
Oct to march that’s why change has been effected from 1st Oct to avoid any
difficulty in implementation of the provision.
After
change , Rule 7 will not override the Rule 5 which deals with point of taxation
in relation to service tax on new services.
Presently
first proviso to Rule 7 provides that where the payment is not made within a
period of 6 months of the date of invoice, the point of taxation shall be
determined as if this rule does not exist.
But
after amendment, the proviso would be 'where the
payment is not made within a period of 3 months of the date of invoice, the
point of taxation shall be the date immediately following the said period of 3
months.'
It
means that if payment of invoice is not made within three months from the date
of invoice, POT in such case would be :-
Date of invoice+3 months
Suppose
invoice date is 01 oct 2014 then POT would be 02 Jan 2015 ( i.e 1.10.2014 + three months)
For
invoices issued before 1-10-2014, a new Rule 10 inserted which will overrides
first proviso to rule 7 and provides that if the invoice in respect of a
service, for which point of taxation is determinable under rule 7 has been
issued before 1-10-2014 but payment has not been made as on the said day, the
point of taxation shall be determined as follows —
(a)
if payment is made within a period of 6 months from the date of invoice, POT
would be date on which payment is made;
(b)
if payment is not made within
a period of 6 months from the date of invoice, POT shall be determined as if
rule 7 and this rule do not exist. It means that POT would be determined based
on other rules
