Rule 3 - Determination of point of taxation - Point of Taxation Rules, 2011

1 [3. Determination of point of taxation.- For the purposes of these rules, unless otherwise provided, point of taxation shall be,- (a) the time when the invoice for the service provided or to be provided is issued: 2 [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) in a case, where the person providing the service, receives a payment before the time specified in clause (a), the time, when he receives such payment, to the extent of such payment. 3 [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).] Explanation . - For the purpose of this rule, wherever any advance by whatever name known, is received by the service provider towards the provision of taxable service, the point of taxation shall be the date of receipt of each such advance.] **************** Notes: 1. Substituted vide notification no. 25/2011 ST dated 31-3-2011 , before it was read as, 3. Determination of point of taxation.- For the purposes of these rules, unless otherwise stated, point of taxation‟ shall be determined in the following manner, namely:- (a) a provision of service shall be treated as having taken place at the time when service is provided or to be provided; and (b) if, before the time specified in clause (a), the person providing the service issues an invoice or receives a payment, the service shall, to the extent covered by the invoice or the payment made thereof, be deemed to have been provided at the time the invoice was issued or the payment was received, as the case may be, whichever is earlier. Explanation.- For the purposes of this rule, wherever any advance, by whatever name known, is received by the service provider towards the provision of taxable service, the point of taxation shall be the date of receipt of each such advance. Explanation 2.- For the purposes of this rule, in respect of services taxable under section 66A of the Act, the point of taxation under clause (b) shall be the date on which the invoice is received, or the payment is made, as the case may be, whichever is earlier. 2. Substituted vide notification no. 4/2012 ST dated 17-3-2012, w.e.f. 1.4.2012 , before it was read as, Provided that where the invoice is not issued within fourteen days of the completion of the provision of the service, the point of taxation shall be date of such completion. 3. Inserted vide notification no. 4/2012 ST dated 17-3-2012, w.e.f. 1.4.2012 ,