Service Tax - Clarification on hiked rates applicability - Board shies away
NOW Service Tax is applicable at the rate of 14% from 1.6.2015, there are many doubts in the minds of officers and assessees on the applicability of 14% on ongoing transactions.
When the service is rendered, invoice is issued and payment received before 1st June 2015, there is no problem. But what is the rate when:
1. Service is rendered before 1.6.2015, invoice is issued before 1.6.2015 but payment is received after 1.6.2015?
2. Service is rendered before 1.6.2015, but invoice is issued after 1.6.2015 and payment is received after 1.6.2015,?
3. Service is rendered before 1.6.2015, invoice is issued after 1.6.2015 and payment is received before 1.6.2015?
4. Service is rendered after 1.6.2015, invoice is issued after 1.6.2015 and payment is received before 1.6.2015?
5. Service is rendered after 1.6.2015, invoice is issued before 1.6.2015, but payment is received after 1.6.2015?
6. Service is rendered after 1.6.2015, invoice is issued before 1.6.2015 and payment is received before 1.6.2015?
Maybe the rates would be as per the table below.
S. No. | Rendering service | Invoice Issued | Payment Received | Rate % |
|---|---|---|---|---|
1. | before | before | after | 12.36 |
2. | before | after | after | 14.00 |
3. | before | after | before | 12.36 |
4. | after | after | before | 14.00 |
5. | after | before | after | 14.00 |
6. | after | before | before | 12.36 |
DDT 2598 15 05 2015, had explained this position and also the contradiction between Rule 4 and Section 67A. We requested the Board to clarify the position before notifying 14% rate in the light of Section 67A. We also reminded them that in the earlier round when the tax was enhanced from 10% to 12&%, Board had issued two circulars No. dated 08.05.2012 and No. dated 28.03.2012, both of which were quashed by the Delhi High Court in 2013-TIOL-81-HC-DEL-ST.
Board almost gave a clarification in the TRUJS letter, but for some reason withdrew it at the last moment. Let us hope they come out with the clarification before 1 st June 2015. And not replicating the circulars, which were quashed.