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Effect of POT Rules 2011 on change in Service Tax Rate
March, 13th 2015

Effect of POT Rules, 2011 on change in rate of Service Tax.

Although this effect is to be reckoned from the effective date as notified by the Central Government.

Sr. No.

Taxable Service Provided

Issue of Invoice

Receipt of Payment

Point of Tax

Rate Applicable

1.

Before

After

After

Earlier of date of payment/issue of invoice

14%

2.

Before

Before

After

Date of issue of invoice

12.36%

3.

Before

After

Before

Date of payment

12.36%

4.

After

Before

After

Date of Payment

14%

5.

After

Before

Before

Earlier of date of payment / Issue of Invoice

12.36%

6.

After

After

Before

Date of issue of Invoice

14%

Note:-

  1. The proposed levy of Swachh Bharat Cess @ 2% is also in the nature of service tax as narrated in clause 117 of the Finance Bill 2015. Thus POT rules shall equally apply to it in the same manner as mentioned above.
  2. The words ‘Before’ and ‘After’ in the above table mean before/after the date to be notified.
  3. In case of Sr. No. 3 and Sr. No. 5 above, if the payment is not credited in the bank within 4 working days from the date when there is change in effective rate of tax, the new rate of 14% would apply. (Rule 2A of POT Rules,2011)
  4. The rate of 12.36% is inclusive of Education Cess and SHE Cess.

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ca.akashphophalia@gmail.com

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