Seeks to amend Point of Taxation Rules, 2011 to amend and introduce certain provisions under the Rules.
March, 31st 2012
[TO BE PUBLISED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II,
SECTION 3, SUB SECTION (i)]
Government of India
Ministry of Finance
(Department of Revenue)
New Delhi, the 17th March, 2012
Notification No.4/2012 - Service Tax
G.S.R. (E).- In exercise of the powers conferred by clause (a) and clause (hhh) of
sub-section (2) of section 94 of the Finance Act, 1994 (32 of 1994), the Central
Government hereby makes the following rules further to amend the Point of Taxation
Rules, 2011, namely: --
1. (1) These rules may be called the Point of Taxation (Amendment) Rules, 2012.
(2) They shall come into force on the 1st day of April, 2012.
2. In the Point of Taxation Rules, 2011 (hereinafter referred to as the said rules), in
rule 2, --
(a) after clause (b), the following clause shall be inserted, namely :--
(ba ) "change in effective rate of tax" shall include a change in the portion of value
on which tax is payable in terms of a notification issued in the Official Gazette
under the provisions of the Act, or rules made thereunder;
(b) in clause (c), for the words "or to be provided continuously, under a contract,
for a period exceeding three months," , the words "or to be provided continuously
or on recurrent basis, under a contract, for a period exceeding three months with
the obligation for payment periodically or from time to time," shall be subs tituted.
3. After rule 2 of the said rules, the following rule shall be inserted, namely: --
,,2A. Date of payment.-- For the purposes of these rules, "date of payment" shall be
the earlier of the dates on which the payment is entered in the books of accou nts or
is credited to the bank account of the person liable to pay tax:
Provided that --
(A) the date of payment shall be the date of credit in the bank account when --
(i) there is a change in effective rate of tax or when a service is taxed for
the first time during the period between such entry in books of
accounts and its credit in the bank account; and
(ii) the credit in the bank account is after four working days from the date
when there is change in effective rate of tax or a service is taxed for the
first time; and
(iii) the payment is made by way of an instrument which is credited to a
(B) if any rule requires determination of the time or date of payment received,
the expression "date of payment" shall be construed to mean such date on
which the payment is received;.
4. In rule 3 of the said rules,-
(a) in clause (a), for the proviso, the following proviso shall be substituted,
"Provided that where the invoice is not issued within the time period specified
in rule 4A of the Service Tax Rules,1994, the point of taxation shall be the date of
completion of provision of the service";
(b) after clause (b), the following proviso shall be inserted, namely: --
"Provided that for the purposes of clauses (a) and (b), --
(i) in case of continuous supply of service 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 receiver of service 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;
(ii) wherever the provider of taxable service receives a payment up to rupees
one thousand in excess of the amount indicated in the invoice, the point
of taxation to the extent of such excess amount, at the option of the
provider of taxable service, shall be determined in accordance with the
provisions of clause (a)."
5. In rule 4 of the said rules, the Explanation shall be omitted.
6. For rule 5 of the said rules, the following shall be substituted, namely: --
"5. Payment of tax in case of new services.-- Where a service is taxed for the first
(a) no tax shall be payable to the extent the invoice has been issued and the
payment received against such invoice before such service became taxable;
(b) no tax shall be payable if the payment has been received before the service
becomes taxable and invoice has been issued within fourteen days of the date when
the service is taxed for the first time.".
7. Rule 6 of the said rules shall be omitted.
8. For rule 7 of the said rules, the following rule shall be substituted, namely: --
,,7. Determination of point of taxation in case of specified services or persons.--
Notwithstanding anything contained in these rules, the point of taxation in respect
of the persons required to pay tax as recipients of service under the rules made in
this regard in respect of services notified under sub-section (2) of section 68 of the
Act, shall be the date on which payment is made:
Provided that, where the payment is not made within a period of six
months of the date of invoice, the point of taxation shall be determined as if this
rule does not exist:
Provided further that in case of "associated enterprises", where the
person providing the service is located outside India, the point of taxation shall be
the date of debit in the books of account of the person receiving the service or date
of making the payment whichever is earlier.
9. After rule 8 of the said rules, the following rule shall be inserted, namely: --
"8A. Determination of point of taxation in other cases.- Where the point of
taxation cannot be determined as per these rules as the date of invoice or the date
of payment or both are not available, the Central Excise officer, may, require the
concerned person to produce such accounts, documents or other evidence as he
may deem necessary and after taking into account such material and the effective
rate of tax prevalent at different points of time, shall, by an order in writing, after
giving an opportunity of being heard, determ ine the point of taxation to the best of
[F. No. 334 /1 /2012- TRU]
Under Secretary to the Government of India
Note.- The principal notification was published in the Gazette of India, Extraordinary,
Part II, Section 3, Sub-section (i), vide notification number. 18/2011 - Service Tax, dated
the 1 st March, 2011, G.S.R. 175 (E), dated the 1 st March, 2011 and was last amended by
notification number. 41/2011-Service Tax, dated the 27 th June, 2011 vide number G.S.R.
490 (E), dated the 27 th June, 2011.