Page 123 - DCOM308_DCOM502_INDIRECT_TAX_LAWS

Indirect Tax Laws

Notes Rule 4. Determination of point of taxation in case of change in effective rate of tax. – Notwithstanding
anything contained in rule 3, the point of taxation in cases where there is a change in effective
rate of tax in respect of a service, shall be determined in the following manner, namely:-
(a) In case a taxable service has been provided before the change in effective rate of tax,-
(i) Where the invoice for the same has been issued and the payment received after the change in
effective rate of tax, the point of taxation shall be date of payment or issuing of invoice, whichever
is earlier; or
(ii) Where the invoice has also been issued prior to change in effective rate of tax but the
payment is received after the change in effective rate of tax, the point of taxation shall be the date
of issuing of invoice; or

(iii) Where the payment is also received before the change in effective rate of tax, but the invoice
for the same has been issued after the change in effective rate of tax, the point of taxation shall be
the date of payment;
(b) In case a taxable service has been provided after the change in effective rate of tax,-
(i) Where the payment for the invoice is also made after the change in effective rate of tax but the
invoice has been issued prior to the change in effective rate of tax, the point of taxation shall be
the date of payment; or
(ii) Where the invoice has been issued and the payment for the invoice received before the
change in effective rate of tax, the point of taxation shall be the date of receipt of payment or date
of issuance of invoice, whichever is earlier; or

(iii) Where the invoice has also been raised after the change in effective rate of tax but the
payment has been received before the change in effective rate of tax, the point of taxation shall
be date of issuing of invoice.
Explanation – For the purposes of this rule, “change in effective rate of tax” shall include a change
in the portion of value on which tax is payable in terms of a notification issued under the
provisions of Finance Act, 1994 or rules made thereunder.
(ii) Corporate assessees are given the liberty to pay tax on the value of taxable service, provided
th
by them in a month, by the 6 of the following month if tax is deposited electronically and 5 of
th
the following month if tax is deposited in any other manner. Further, in case the assessee is
individual or proprietary firm or partnership firm, tax payment is required to be made only once
th
th
in a quarter i.e., by 6 of the following quarter if tax is deposited electronically and 5 of the
following quarter if tax is deposited in any other manner.
(iii) The process of registration of assessees has been considerably simplified.
(iv) No separate accounts have been prescribed for the purposes of Service Tax. It has been
provided that accounts being maintained by the assessees under any other law in force would be
sufficient. This has placed the Department at considerable inconvenience to itself, so as to
minimize difficulties for the assessees.
(v) The Finance Act, 2001 has introduced self assessment for service tax returns; thereby sparing
the assessees from the rigours of routine scrutiny and assessment.

(vi) Frequency of filing the returns in the form of ST 3 or ST3A as the case may be is minimized.
Filing of Statutory return has been made half yearly and by the 25 of the month following the
th
th
half-year ending on 31 arch and 30 September. This is in replacement of the monthly/quarterly
st
returns prescribed earlier.

118 LOVELY PROFESSIONAL UNIVERSITY