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TMI BlogPOINT OF TAXATION ??X X X X Extracts X X X X X X X X Extracts X X X X ..... POINT OF TAXATION ?? X X X X Extracts X X X X X X X X Extracts X X X X ..... LAR PERIOD WE ARE "ISSUING REMINDER" TO PARTY FOR "REMITTANCE OF PAYMENT" ON RECEIVING AMOUNT WE PREPARE SALE ACCOUNT FOR BOOKING INTO ACCOUNTS WHAT IS POINT OF TAXATION FOR SERVICE TAX IN ABOVE TRANSACTION ?? Reply By KASTURI SETHI: The Reply: Pl. go through Explanation to Rule 3 Point of Taxation Rules, 2011 (as amended) which is amended below:- Explanation - For the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose 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.". Reply By Ganeshan Kalyani: The Reply: I agree with the views submitted by Sri Kasturi Sir. The point of taxation for service provider is the point of each time the payment is receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Thanks. Reply By CS SANJAY MALHOTRA: The Reply: I also validate the views of Sh. Kasturi ji. Reply By abbas mukhi: The Reply: @ Kasturi Shethi Sir, Whether our service falls within the "continuous supply of service" ?? and Position will remain the same if we "issue demand note" instead of "reminder for payment" Thanks.... Reply By abbas mukhi: The Reply: and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sir, if party not paid at all what will the "POINT OF TAXATION" Reply By KASTURI SETHI: The Reply: Sh.Abbas Mukhi Ji, Point-wise reply is as under:- 1. Whether your service falls under the continuous supply of service ? It can be be decided only after perusing terms conditions of the agreement. 2. The department is concerned with the date of invoice. Otherwise there is a differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce between the two wordings. Reminder means you have already taken first action for realization of the amount. Reminder is an other attempt to realise the amount. 3. If the service receiver does not make payment, the point of taxation will be the date of issue of invoice. Service tax is on billed amount. Reply By Ganeshan Kalyani: The Reply: To put it in simple way, the point of taxation for s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice provider is the date of issue of invoice or the date of receipt of amount for the service provider or to be provided. Hope this clarifies your query. Thanks. Reply By KASTURI SETHI: The Reply: Sir, With due respect I would like to say that there is no relaxation for service provider. There is relaxation for Service Receiver under RCM and Small Service Provider (Restricted to limited no. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of invoices). SP has to pay ST on billed amount regardless of the situation whether he receives payment from SR or not. Govt. has done so in order to curb the misuse of "RECEIVABLES" in Balance Sheet (in P& L Account). The assessees used to do window dressing. Govt. cannot keep track when the consideration will be received and payment ST will be made. Reply By Ganeshan Kalyani: The Repl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y: Agreed Sir service provider has to pay service tax on raising invoice whether payment is received or to be received. I request to querist to refer Sri Kasturi Sir's reply over my reply dated 23.02.2016. Thanks. Reply By abbas mukhi: The Reply: @ Kasturi Sir and Ganeshan Sir, I think i have not explained my situation correctly Sir, i am re reiterating my situation clearly. 1.We are providing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service of "Renting of Immovable Property for long term period (say 30 years) 2.As per the terms of contract we have "RIGHT TO RECEIVE"(ONLY RIGHT TO RECEIVE) rent in advance before starting of "PARTICULAR PERIOD (SAY 01.03.2016 TO 28.02.2017) 3.Before Starting "PARTICULAR PERIOD" we are issuing "DEMAND NOTE"(REQUEST LETTER FOR REMITTANCE) for example we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued such demand note (letter) on 25.03.2016 (FOR SERVICE PERIOD OF 01.03.2016 TO 28.02.2017) 4.On receipt of Advance we prepare "SALE ACCOUNT" for booking into our Accounts (it is our internal document, we are not issuing the same to the party). 5.Sir, What will be 'POINT OF TAXATION" for above transaction?? and will make any difference if we issue demand note (letter) on 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.03.2016 (After Starting of Service Period)
NOTE:-On receipt of advance, we issue "RECEIPT TO PARTY"
Please guide to us on this issue....... X X X X Extracts X X X X X X X X Extracts X X X X
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