Pradeep Jain - Chartered Accountant

Will maintenance contract signed before 15.11.2015 attract revised service tax? for e.g. a maintenance contract for one year is signed in April 2015 with payment term quarterly. Will the agency claim revised service tax for the bill for Oct.'15-Dec.'15 quarter?

To our understanding, your question is whether Swachh Bharat Cess is leviable for maintenance contract signed before 15.11.2015 or not. In this regard, we submit that although section 67A of the Finance Act, 1994 states that the rate of service tax applicable on the date of provision of service is applicable, the Point of Taxation Rules depict a different scenario. As per Rule 4 of Point of Taxation Rules, in case of change in rate of service tax, occurrence of any two events out of the three events determine the rate of service tax. The three events are provision of service, issue of invoice and receipt of payment. In the present case, as the payment will be received quarterly and service will be provided after 15.11.2015, two events , i.e., receipt of payment and provision of service occur after 15.11.2015 and so the Swachh Bharat Cess will be leviable on this maintenance contract. However, the FAQ released states that Rule 5 of Point of Taxation will apply which appears to be incorrect. In our opinion, Swachh Bharat Cess would be chargeable on this transaction. For more details, you may also study our article having link as follows :- http://www.new.capradeepjain.com/redirect_artleview_246 {Query replied by CA Neetu Sukhwani}

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Will maintenance contract signed before 15.11.2015 attract revised service tax? for e.g. a maintenance contract for one year is signed in April 2015 with payment term quarterly. Will the agency claim revised service tax for the bill for Oct.'15-Dec.'15 quarter?

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