Friday, October 15, 2010

FINMIN IN A FIX OVER SERVICE TAX RULES

The finance ministry is in a fix over the proposed implementation of point of taxation rules for service tax from October 1 this year with the industry resisting transition to the accrual basis
for taxation of services. Simply put under the accrual based method, the tax will be considered
"paid" when the invoice is made, irrespective of whether or not it is actually paid. This means that
once the invoice is issued, the service provider will have to account for the tax even if he has not
received the amount.

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