Service Tax on payment basis, Service Tax

[RAM NAUDIYAL]

Dear Experts, A service tax liability arises when a service receipient make a payment. It means a Service receiver is liable  to pay tax when he will make a payment. Am i write. Pl advice.

Thanks

Posts / Replies

[JAMES PG]

In case of reverse charge mechanism, service receiver is liable to discharge ST liability when he makes payment or within six months from the date of the Invoice of the service provider, whichever occurs first

[Pradeep Khatri]

Correctly answered by Mr. James.

[vijay kumar]

Liability arises in the month of payment. Tax is to be paid by 6th of the following month, failing which it has to be paid with interest. However, this is when the payment is made within 6 months from the date of invoice issued by the service provider. If not, the point of taxation has to be determined in terms of Rule 3 of PTR, 2011. In my view, "whichever occurs first" has no meaning in this context.