Point of Taxation Rules – Yet to be postponed?
IN his reply to the debate on the Finance Bill, 2011, the Finance Minister told the LokSabha,
Point of taxation Rules are due to come into force from April 1, 2011 and are meant to shift the payment of service tax from only cash basis towards accrual basis. The changes are essential to align the system of payment of taxes between goods and services. Many taxpayers have expressed concerns about some provisions and also sought some time for the switchover on account of changes required in their software. Accordingly, certain changes in the relevant provisions are being worked out and an additional period of three months up to June 30, 2011 is being provided to make the transition. These changes shall be notified shortly after completing the process of consultation.
The Point of Taxation Rules, were notified by Notification No. 18/2011 –S.T dated March 01, 2011 and are to come into force from tomorrow. In our work shop in Mumbai, some delegates had requested the CBEC Chairman to postpone it by six months and the Finance Minister had announced its postponement by three months.
But the notification to postpone the Rules is yet to be issued. Hopefully they will do it today.