Friday, April 15, 2011

SERVICE TAX LIABILITY TOO FIXED AT INVOICE STAGE

The Central Board of Excise and Customs (CBEC) has tweaked service tax rules, making service
providers liable to pay tax as soon as they issue an invoice to their clients or has completed the
service, whichever is earlier. Under the earlier rules, service tax became due only when a provider
received payment for the service. This was at variance with the taxation of goods. States levy
sales tax (value-added tax) on goods when the invoice is issued. Excise duty is also paid at the
factory gate when the goods leave the factory on issuance of an invoice. The new rules provide a
consistent regime for taxation of goods and services and aim to set the stage for the Goods
and Services Tax (GST), which the government intends to roll out from April 2012. The Central
Board of Excise and Customs (CBEC) had put out a draft of these rules for discussion in August last
year. But, the Chartered Accountants and other notified professions will continue to pay service tax on cash basis.

0 comments:

Post a comment