Circular No.154/5/ 2012 ST

FNo 334/1/2012- TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Tax Research Unit

Room No 146, North Block, New Delhi

Dated: 28^th March 2012

To

Chief Commissioner of Customs and Central Excise (All)

Chief Commissioner of Central Excise & Service Tax (All)

Director General of Service Tax

Director General of Central Excise Intelligence

Director General of Audit

Commissioner of Customs and Central Excise (All)

Commissioner of Central Excise and Service Tax (All)

Commissioner of Service Tax (All)

Madam/Sir,

Subject: - Clarification on Point of Taxation Rules - regarding.

1.             Notification No.4/2012 - Service Tax dated the 17^th March 2012 has amended the Point of Taxation Rules 2011 w.e.f. 1^st April 2012, inter- alia, amending Rule 7 which applied to individuals or proprietary firms or partnership firms providing taxable services referred to in sub-clauses (g), (p), (q), (s), (t), (u), (za) and  (zzzzm) of clause (105) of section 65 of the Finance Act, 1994. Rule 7 determined the point of taxation in such cases as the date of receipt of payment. The provisions have been amended both in the Point of Taxation Rules 2011 and the Service Tax Rules 1994 such that from 1^st April 2012 the payment of tax shall be allowed to be deferred till the receipt of payment upto a value of Rs 50 lakhs of taxable services. The facility has been granted to all individuals and partnership firms, irrespective of the description of service, whose turnover of taxable services is fifty lakh rupees or less in the previous financial year.

2.            Representations have been received, in respect of the specified eight services, requesting clarification on determination of point of taxation in respect of invoices issued on or before 31^st March 2012 where the payment has not been received before 1^st April 2012.

3.            The issue has been examined. For invoices issued on or before 31^st March 2012, the point of taxation shall continue to be governed by the Rule 7 as it stands till the said date. Thus in respect of invoices issued on or before 31^st March 2012 the point of taxation shall be the date of payment.

4.            Trade Notice/Public Notice may be issued to the field formations accordingly.

5.            Please acknowledge the receipt of this circular. Hindi version to follow.

(Shobhit Jain)

OSD, TRU

Fax: 011-23092037