Transcript POINT OF TAX RULES

CA NITIN GUPTA
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IN CASE OF SERVICE RECEVIER
IN CASE OF REVERSE CHARGE
• WHERE PAYMENT IS MADE TO THE SERVICE PROVIDER, WITHIN
6 MONTHS FROM THE DATE OF INVOICE
POT = PAYMENT BASIS
• WHERE PAYMENT IS NOT MADE TO THE S.P., WITHIN 6 MONTHS
FROM THE DATE OF INVOICE
POINT OF TAXATION RULE ARE APPLICABLE
IN CASE OF SERVICE RECEVIER
CRR ON INPUT SERVICE
SERVICE TAX AMOUNT PAYABLE TO SERVICE
PROVIDER(PARTIAL PAYABLE AMOUNT OF SERVICE
TAX)
PAYMENT MADE TO
DIRECT DEPARTMENT
ON OR AFTER THE DAY OF RECEIPT OF INVOICE
ON PAYMENT OF VALUE
OF SERVICE AND SERVICE
TAX
PROVIDED THAT IF PAYMENT OF VALUE & SERVICE
TAX NOT MADE WITHIN 3M OF THE DATE OF
INVOICE THEN PAYMENT MADE TO DEPARTMENT
EQUAL TO CRR AVAILED (DEBITING CCR OR PLA)
PROVIDED FUTHER THAT IF PAYMENT MADE AFTER
3M THEN SERVICE RECEVIER CAN TAKE CREDIT
WHICH WAS PAID EARIER
EXAMPLE
Services by way of supply of manpower for any purpose or
security services
 Service Provided by Individual, HUF, partnership firm whether
registered or not or AOP; which are located in taxable territory = 25 %
 Service Receiver - Any business entity registered as body corporate
and located in taxable territory = 75%
 Body corporate here means as defined in section 2(7) of the Companies
Act, 1956 [Rule 2(1)(bc) of the Service Tax Rules]
Value of service provided by an individual ‘N’ – 100000
Service provider – 25%
Service receiver – 75%
BILLING SYSTEM
BILLING DONE BY SERVICE PROVIDER
GROSS VALUE(LABOUR CHARGES)
100000
(25% ON LAB. CHARGES i.e.25000)
S.TAX
3000
EDU. CESS
60
SEC. CESS
30
103090
TOTAL
AT THE TIME OF BILL RECEIVE FROM SERVICE PROVIDER
EXPENSE A/C
CRR ON INPUT SERVICE(ST) A/C
CRR ON INPUT SERVICE(EDU CESS)
CRR ON INPUT SERVICE(SEC CESS)
TO SERVICE PROVIDER (N)
(Being bill have been issued and received)
DR.
DR.
DR.
DR.
100000
3000
60
30
103090
AT THE TIME OF PAYMENT MADE TO SERVICE PROVIDER
SERVICE PROVIDER (N) A/C
DR 103090
DEFERRED CRR ON INPUT SERVICE(ST) A/C
DR. 9000
DEFERRED CRR ON INPUT SERVICE(EDU CESS) DR.
180
DEFERREDCRR ON INPUT SERVICE(SEC CESS)
DR.
90
TO BANK
TO SERVICE PAYABLE A/C(ST)
TO SERVICE PAYABLE A/C (EDU CESS)
TO SERVICE PAYABLE A/C (SEC CESS)
(Being payment made to service provider and as per rule-7 of
POT service tax liability due)
103090
9000
180
90
AT THE TIME OF PAYMENT MADE TO DEPARTMENT
PAYMENT ENTRY
SERVICE PAYABLE A/C(ST)
SERVICE PAYABLE A/C (EDU CESS)
SERVICE PAYABLE A/C (SEC CESS)
TO BANK A/C
(Being service tax liability paid)
DR.
DR.
DR.
CRR BOOK ENTRY
CRR ON INPUT SERVICE(ST) A/C
DR.
CRR ON INPUT SERVICE(EDU CESS)
DR.
CRR ON INPUT SERVICE(SEC CESS)
DR.
TO DEFERRED CRR ON INPUT SERVICE(ST) A/C
TO DEFERRED CRR ON INPUT SERVICE(EDU CESS)
TO DEFERREDCRR ON INPUT SERVICE(SEC CESS)
(Being CCR Book as per Rule 4(7) of CCR rule 2004)
9000
180
90
9270
9000
180
90
9000
180
90