Rule 7 - Determination of point of taxation in case of specified services or persons - Point of Taxation Rules, 2011

1 [ 7. Determination of point of taxation in case of specified services or persons.- Notwithstanding anything 2 [contained in rules 3,4, or 8], 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: 3 [Provided that where the payment is not made within a period of three months of the date of invoice, the point of taxation shall be the date immediately following the said period of three months] 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.] 4 [Provided also that where there is change in the liability or extent of liability of a person required to pay tax as recipient of service notified under sub-section (2) of section 68 of the Act, in case service has been provided and the invoice issued before the date of such change, but payment has not been made as on such date, the point of taxation shall be the date of issuance of invoice. ] 5 [Provided also that in case of services provided by the Government or local authority to any business entity, the point of taxation shall be the earlier of the dates on which, - (a) any payment, part or full, in respect of such service becomes due, as specified in the invoice, bill, challan or any other document issued by the Government or local authority demanding such payment; or (b) payment for such services is made.] ************** Notes: 1. Substituted vide notification no. 4/2012 ST dated 17-3-2012, w.e.f. 1.4.2012 , before it was read as, 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,- (a) the services covered by sub-rule (1) of rule 3 of Export of Services Rules, 2005; (b) the persons required to pay tax as recipients under the rules made in this regard in respect of services notified under sub-section (2) of section 68 of the Finance Act, 1994; (c) individuals or proprietary firms or partnership firms providing taxable services referred to in sub-clauses 2[(g)], (p), (q), (s), (t), (u), (za), (zzzzm) of clause (105) of section 65 of the Finance Act, 1994, shall be the date on which payment is received or made, as the case may be: Provided that in case of services referred to in clause (a), where payment is not received within the period specified by the Reserve Bank of India, the point of taxation shall be determined, as if this rule does not exist. Provided further that in case of services referred to in clause (b) 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 also 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 credit in the books of account of the person receiving the service or date of making the payment whichever is earlier. Earlier Substituted vide notification no. 25/2011 ST dated 31-3-2011 , before it was read as, 7. Determination of point of taxation in case of associated enterprises.- The point of taxation in respect of associated enterprises shall be the date on which the payment has been made, or invoice under rule 4A of the Service Tax Rules, 1994 has been issued, or the date of debit or credit in books of accounts of the person liable to pay service tax, whichever is earlier. 2. Substituted vide Notification No. 13/2014 Service Tax dated 11th July, 2014 w.e.f. 1st day of October, 2014 , before it was read as, contained in these rules 3. Substituted vide Notification No. 13/2014 Service Tax dated 11th July, 2014 w.e.f. 1st day of October, 2014 , before it was read as, 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: 4. Inserted vide Not. 21/2016 - Dated 30-3-2016 5. Inserted vide Not. 24/2016 - Dated 13-4-2016