Clarification on Date of Completion of Service
under Point of Taxation Rules, 2011
[Service Tax Circular
No. 144 dated 18th July 2011]
Subject: - Clarification on “Completion of service”.
Representations
requesting clarification on “completion of service” as provided under the Point
of Taxation Rules, 2011 and Service Tax Rules, 1994 have been received from
certain sections of service providers that in many situations it is not
possible to issue invoices within 14 days of the completion of the service
since the exact date of completion of service is difficult to identify. Instances have been given where after the
task of providing the service may be physically accomplished, but certain other
formalities are required to be completed from the client’s end before an
invoice can be issued.
2. These representations have been examined. The
Service Tax Rules, 1994 require that invoice should be issued within a period
of 14 days from the completion of the taxable service. The invoice needs to
indicate interalia the value of service so completed.
Thus it is important to identify the service so completed. This would include
not only the physical part of providing the service but also the completion of
all other auxiliary activities that enable the service provider to be in a
position to issue the invoice. Such
auxiliary activities could include activities like measurement, quality testing
etc which may be essential pre-requisites for
identification of completion of service. The test for the determination whether
a service has been completed would be the completion of all the related
activities that place the service provider in a situation to be able to issue
an invoice. However such activities do not include flimsy or irrelevant grounds
for delay in issuance of invoice.
The above
interpretation also applies to determination of the date of completion of
provision of service in case of “continuous supply of service”.
3. Trade Notice/Public Notice may be issued to
the field formations accordingly.
F.No.354/93/2011-TRU