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Concept Note - Rate Change

The service tax rate in India has been increased from 10.3% to 12.36% effective April 1, 2012. The applicable tax rate depends on the point of taxation rules related to the date of service completion, invoice issuance, and payment. For services completed before April 1, 2012, the tax rate is 10.3% regardless of when the invoice was issued or payment was made. However, if the invoice was issued or payment was made on or after April 1, 2012, for services completed before that date, the new 12.36% rate applies. The date of payment is defined as the earlier of the date of entry in books of accounts or actual credit in bank account.

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25 views2 pages

Concept Note - Rate Change

The service tax rate in India has been increased from 10.3% to 12.36% effective April 1, 2012. The applicable tax rate depends on the point of taxation rules related to the date of service completion, invoice issuance, and payment. For services completed before April 1, 2012, the tax rate is 10.3% regardless of when the invoice was issued or payment was made. However, if the invoice was issued or payment was made on or after April 1, 2012, for services completed before that date, the new 12.36% rate applies. The date of payment is defined as the earlier of the date of entry in books of accounts or actual credit in bank account.

Uploaded by

inaayats
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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SERVICETAXAMENDMENTS UNIONBUDGET2012

A. SERVICETAXRATECHANGE

ServiceTaxRatehasincreasedfrom10.3%to12.36%witheffect fromApril1,2012 ThecorrectrateforchargingtaxwoulddependuponthePointof TaxationRules,2012 Thebasisforapplyingservicetaxwoulddependuponservice completion,dateofissueofinvoiceandthedateofpayment Dateofpaymenthasbeendefinedtobetheearlierofthedatesof entryintobooksofaccountsoractualcreditinthebankaccount Whenthereisachangeintheeffectiverateoftaxoranewlevy betweenthesaidtwodates,thedateofpaymentshallbethedate ofactualcreditinthebankaccount,iftheamountiscredited throughabankinginstrumentmorethanfourworkingdaysafter thedateofsuchchange. Adhocpaymentsmadeincontinuoussupplyofworktobe consideredasindependentassignmentsforPointofTaxation Incaseofanewservice,servicetaxisnotchargeablewhere paymentisreceivedbeforetheservicebecomestaxableand
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invoiceisissuedwithinaperiodof14days(fromthedatethe servicebecomestaxable)

B. ServiceTaxRateunderDifferentCircumstances

ServiceCompleted
Before01stApril2012 Before01stApril2012 Before01stApril2012 Before01stApril2012 After01stApril2012 After01stApril2012 After01stApril2012

Invoiceissued

Payment

TaxRate
10.30% 10.30% 12.36% 10.30% 12.36% 10.30% 12.36% 12.36% 10.30%

SERVICESRENDERED Before01stApril2012 Anytime st After01 April2012 Uptill05thApril2012* st After01 April2012 After05thApril2012 After01stApril2012 Before01stApril2012 Before01stApril2012 After01stApril2012 st Before01 April2012 Before01stApril2012 After01stMarch2012 Before01stApril2012 SERVICESIMPORTED Before01stApril2012 Before01stApril2012 After01stApril2012 st st After01 April2012 After01 March2012 Before01stApril2012 *Ifthepaymentiscreditedinthebooksofaccountsbefore31stMarch2012

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Private&Confidential

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