Trade Notice No.06/2012 – Service Tax/SH
Dated Shillong, 31.05.2012.
Subject:- Clarification on Rate of Tax - regarding.
Attention of the members of Trade, Industry and all others concerned are hereby invited to the Board’s F.No.354/69/2012-TRU dated 8th May 2012 on the above subject.
1. The rate of Service Tax has been restored to 12% w.e.f. 1st April 2012. Representations have been received regarding clarification on the rate of tax applicable wherein invoices were raised before 1st April 2012 and the payments shall be after 1st April 2012. Clarification has been requested in case of 8 specific services provided by individuals or proprietary firms or partnership firms, to which Rule 7 of point of taxation Rules 2011 was applicable and services on which tax is paid under reverse charge.
2. The rate of service tax prevalent on the date when the point of taxation occurs is rate of service tax applicable on any taxable service. In case of the 8 specified services and services wherein tax is required to be paid on reverse charge by the service receiver the point of taxation is the date of payment. Circular No. 154/5/2012 – ST dated 28th March 2012 has also clarified the same. Thus in case of such 8 specified services provided by individuals or proprietary firms or partnership firms and in case of Services wherein tax is required to be paid on reverse charge by the service receiver, if the payment is received or made, as the case may be, on or after 1st April 2012, the service tax needs to be paid @ 12%.
3. The invoices issued before 1st April 2012 may reflect the previous rate of tax (10% and cess). In case of need, supplementary invoices may be issued to reflect the new rate of tax (@12% and cess) and recover the differential amount. In case of reverse charge the service receiver pays the tax and takes the credit on the basis of the tax payment challan. Cenvat credit can be availed on such supplementary invoices and tax payment challans, subject to other restrictions and conditions as provided in the Cenvat Credit Rules 2004.
4. Hindi version will follow.
Board’s letter F. No. 354/69/2012-TRU dated 8th May 2012
Disclaimer: Though care has been taken to reproduce the text in its original form, in case of any inadvertent mistake, the above mentioned letter may be referred to.
(Anil Kumar Gupta)