Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
Tax Research Unit
Circular No. 158/9/ 2012 – ST
Room No 146, North Block, New Delhi
Dated : 8th May 2012
To
Chief Commissioner of Customs and Central Excise (All)
Chief Commissioner of Central Excise & Service Tax (All)
Director General of Service Tax
Director General of Central Excise Intelligence
Director General of Audit
Commissioner of Customs and Central Excise (All)
Commissioner of Central Excise and Service Tax (All)
Commissioner of Service Tax (All)
Madam/Sir,
Subject: - Clarification on Rate of Tax -
regarding.
- The rate of service tax has been restored to 12% w.e.f. 1st April
2012. Representations have been received requesting clarification on the
rate of tax applicable wherein invoices were raised before 1st April 2012
and the payments shall be after 1st April 2012. Clarification has been
requested in case of the 8 specified services provided by individuals or
proprietary firms or partnership firms, to which Rule 7 of Point of Taxation
Rules 2011 was applicable and services on which tax is paid under reverse
charge.
- The rate of service tax prevalent on the date when the point of taxation
occurs is rate of service tax applicable on any taxable service. In case of
the 8 specified services and services wherein tax is required to be paid on
reverse charge by the service receiver the point of taxation is the date of
payment.
Circular No 154/5/2012 – ST dated 28th March 2012 has also
clarified the same. Thus in case of such 8 specified services provided by
individuals or proprietary firms or partnership firms and in case of
services wherein tax is required to be paid on reverse charge by the service
receiver, if the payment is received or made, as the case maybe, on or after
1st April 2012, the service tax needs to be paid @12%.
- The invoices issued before 1st April 2012 may reflect the previous rate
of tax (10% and cess). In case of need, supplementary invoices may be issued
to reflect the new rate of tax (12% and cess) and recover the differential
amount. In case of reverse charge the service receiver pays the tax and
takes the credit on the basis of the tax payment challan. Cenvat credit can
be availed on such supplementary invoices and tax payment challans, subject
to other restrictions and conditions as provided in the Cenvat Credit Rules
2004.
- Trade Notice/Public Notice may be issued to the field formations
accordingly.
- Please acknowledge the receipt of this circular. Hindi version to
follow.
(Dr. Shobhit Jain)
OSD, TRU
Fax: 011-23093037
F.No 354/69/2012- TRU