May 302015
 

Taxation of Allowances

Meaning of allowance

Allowance is generally defined as fixed quantity of money or other substance given regularly in addition to salary for the purpose of meeting some particular requirement connected with the services rendered by the employee or as compensation for unusual conditions. It is fixed, pre-determined and given irrespective of actual expenditure

Under income tax act for exemption purpose allowances are categorized under three heads. One of the commonly used category is allowances which are based on actual amount expended by an employee. In our previous blog we discuss in detail 6 types of allowance where allowances are exempt up-to amount actually expended by employee.

Here in this blog we will discuss 2nd category of allowances which are exempted up-to amount specified in the income tax rules.

When Exemption Does Not Depend Upon Expenditure-

Name of allowance Brief Description of allowance Amount to be exempted from taxation
Special compensatory (Hill Areas) Allowance It includes any special compensatory allowance in the nature of special compensatory (hilly areas etc.) allowance or high altitude allowance or uncongenial climate allowance or snow bound area allowance or avalanche allowance. Amount exempt from tax varies from Rs. 300/- per month to Rs. 7000/- per month
Border area allowance It includes any special compensatory allowance in the nature of border area allowance or remote locality allowance or difficult area allowance or disturbed area allowance. The amount of exemption varies from Rs.200/- per month to Rs. 1,300/- per month
Tribal areas/Scheduled areas allowance Tribal area allowance is given in(a)Madhya Pradesh;

(b)Tamil Nadu;

(c) Uttar Pradesh;

(d)Karnataka;

(e)Tripura;

(f)Assam;

(g)West Bengal;

(h)Bihar;

(i)Orissa.

Rs.200/- per month
Allowance for transport employees It is an allowance granted to an employee working in any transport system to meet his personal expenditure during his duty performed in the course of running of such transport from one place to another place provided that such employee is not in receipt of daily allowance. The amount of exemption-a.    70% of such allowance; or

b.    Rs. 10,000/- per month, whichever is lower.

Children education allowance This allowance is given for children’s education. The amount exempt is limited to Rs. 100/- per month per child up to a maximum of two children.
Hostel expenditure allowance This allowance is granted to an employee to meet the hostel expenditure on his child It is exempt from tax to the extent of Rs. 300/- per month per child up to a maximum of two children.
Compensatory field area allowance If the exemption is taken,the same employee cannot claim any exemption in respect of border area allowance mentioned above. Exemption is limited to Rs. 2,600/- per month in some cases.
Compensatory modified area allowance If the exemption is taken the same employee cannot claim any exemption in respect of border area allowance mentioned above. Exemption is limited to Rs. 1,000/- per month in some cases.
Counter insurgency allowance It includes any special allowance in the nature of counter-insurgency allowance granted to the members if armed forces operating in areas away from their permanent locations.If this exemption is taken, the same employee cannot claim any exemption in respect of border area allowance mentioned above. Exemption is limited to Rs. 3,900/- per month in some cases.
Transport allowance Transport allowance is granted to an employee to meet his expenditure for the purpose of commuting between the place of his residence and the place of his duty. It is exempt up to Rs.800 per month. After FA 2015 get assent from president the exemption for this allowance increased to Rs. 1600/- per month.
Underground allowance Underground allowance is granted to an employee who is working in uncongenial,unnatural climate in underground mines. Exemption is limited to Rs. 800/- per month
High altitude allowance It is granted to the members of armed forces operating in high altitude areas. It is exempt from tax up to Rs.1,060/- per month (for altitude of 9,000 to 15,000 feet) orRs. 1,600 per month (for altitude above 15,000/-feet).
Highly active field area allowance This special allowance is granted to the members of armed forces in the nature of special compensatory highly active field area allowance. It is exempt from tax up to Rs.4,200/- per month. 
Island duty allowance This is special allowance is granted to the members of armed forces in the nature of Island (duty) allowance in Andaman and Nicobar and Lakshadweep group of Island. It is exempt up to Rs. 3,250/- per month.

May 292015
 
Due dates for the Month of June 2015
05-06-2015
Service Tax
- Service Tax Payment by Companies for May
Central Excise#
- Payment of Excise Duty for all Assessees (other than SSI Units) for May
07-06-2015
Income Tax
- TDS Payment for May
10-06-2015
Central Excise
- Monthly Return in Form ER-1 (Ann-12) for other than units availing SSI exemption for May
– Monthly Return in Form ER-2 (Ann-13) by 100% EOUs for May
– Montly information relating to principal units in Form ER-6 (Ann – 13AC) for specified assessees for July
– Exports – Procurement of specified goods from EOU for use in manufacture of Export goods in Form Ann-17B for DTA units, procuring specified goods from EOU for manufacture of export goods
– Proof of Exports in form Ann.-19, once in a month for all exporters, exporting goods under Bond
– Export detains in Form Ann.-20, for Manufacturing following simplified export procedure.
– Removal of excisable goods for specified use at concessional rate of duty in terms of Rules described in Col. 4.
15-06-2015
Providend Fund
- PF Payment for May
Income Tax
- Advance Income Tax – Companies.
21-06-2015
ESIC
- ESIC Payment for May
MVAT *
– MVAT Monthly Return for May (Eligibility as per Mahavat Website)
30-06-2015
Profession Tax
- Profession Tax (Enrollment) – Payment for Financial Year 2015/16.
- Monthly Return (covering salary paid for the preceding month) (Tax Rs. 50,000 or more)
Central Excise
- Particulars relating to clearances, electricity load etc. in Form Ann. – 4, exceeding the limit of Rs. 90 lakhs of exempted clearances for Small scale units availing exemption and whose turnover exceeds or has exceeded Rs. 90 lakhs in a financial year, as the case may be.
* If payment of MVAT is made as per time prescribed, additional 10 days are given for uploading e-return
# if Excise Duty / Service Tax paid electronically through internet banking, the date is to be reckoned as 6th instead of 5th.
Software Solutions Available on
XBRL | TDS | Payroll | Web Payroll | Web HRMS | Fixed Asset | Service Tax | IncomeTax | Digital Signature
PDF Signer | Attendance Machine | Data Backup Software
Sensys Technologies Pvt. Ltd.
HO: 524, Master Mind1, Royal Palms, Goregaon East, Mumbai – 400 065.
Branches: Delhi & NCR | Pune | Bangalore | Hyderabad | Kolkata | Indore
http://www.sensysindia.com | contact@sensysindia.com
Visit our BLOG for latest news and updates related to XBRL, Income Tax, HR & Payroll, PF / ESIC / TDS / PT etc..
Click here to visit Sensys BLOG
May 292015
 

Frequently Asked Questions on Service Tax

Q. What is the effective rate of service tax that I need to charge on Invoice being raise 26-05-2015 for the completed service?

Comments: 12.36%

Q What is the effective rate of service tax that I need to charge on the advance received today for the service to be provided after 01.06.2015?

Comments: In case you also raise the invoice prior to 30.06.2015 (law provides time upto 30days from the date of receipt of the advance) then you can charge 12.36% in case the invoice is raised after 01.06.2015 then the same needs to be charged at 14%.

Q. Work is assigned in the month of May 2015 and 90% of the work is completed as on 31st May 2015, no advance is received, Invoice can be raised only on full completion of service in the month of June 2015. What is the service tax needs to be charged?

Comments: Since the Invoice would be raised in the month of June 2015 and payment would be received in the month of June 2015 14% would be applicable.

Q. I am a builder paying service tax on earlier of receipt of money or completion of milestone as per the contract, how should I apply the rate charge provision?

Comments: For the advance received prior to milestone and if the invoice is raised prior to 31st May 2015 the applicable rate of tax to that extent shall be 12.36% and all further milestone and payments shall be liable at 14%. For the milestone falling prior to 31st May 2015 and if the invoice has raised prior to such date 12.36% would apply to the extent of such amount as mentioned in such milestone, for the balance milestones amounts 14% would apply.

Q. I am a private limited company need to pay service tax on goods transport agency service under reverse charge mechanism? How to apply this rate change provision?

Comment: Point of taxation in case of service tax payment under reverse charge by the recipient of the service is governed by Rule 7 of the POTR, 2011 which has a overriding effect of Rule 4 and hence service tax prevalent as on the date of payment to vendor needs to be adopted however if the payment has not been made in 3 months then the rate prevent as on the date after the expiry of 3 months from the date of Invoice needs to be adopted. For all the payment made before 31.05.2015 service tax would be applicable at 12.36% and for the payments made there after, 14% rate would be applicable for all the invoice received date prior to 28th February 2015 on which the payment is still pending would be liable at the rate of 12.36% and for the Invoice raise from 1st March 2015 onwards for which the payment is pending as on 31st May 2015 will be liable at the rate of 14%.

Q. Do we need to charge Education cess and Secondary and Higher Education Cess on Service Tax w.e.f 01.06.2015?

Comments: No, the levy of the same gets abolished from June 1, 2015 and the same need not be charged from June 1, 2015.

Q. Do we need to charge Swach Bharat Cess on Service Tax?

Comments: No, Swach Bharat cess shall be applicable from the date to be notified. It has not been notified yet. Therefore, it shall not be applicable from June 1, 2015

Conclusion

The service providers may need to ensure that bills in respect of the completed services and advance receipts is raised and service tax is paid in next month/ month next to quarter. This would ensure that there are no demands for differential service tax, citing increase in service tax rate to take effect from 1.6.2015. The customer may also not have any objection especially those who are unable to avail the credit.

May 282015
 

Impact of Change in Service Tax Rate

The immediate impact of the change in rate would be increase in the service tax amount which is to be paid by the service provider post 1.6.2015. As per Section 68(1), service tax is a levy which is payable by the service provider. ST is a destination based levy, could be collected from the customer and paid to the Government.

Service provider has statutory right to pass on the burden of the service tax component to service receiver in absence of prescription by legislature that service tax burden should not be passed on. The Finance Act, 1994 does not contain any such restriction that service provider should not pass on the burden to the service receiver.

However it all depends on terms of contract between the parties. When the contracted price includes all taxes, then the increased service tax burden of 14% would go out of the pocket of the service provider.

When the terms are taxes including service tax extra as applicable, then the service provider could collect and pay the service tax. For all existing contracts as well as future contracts to be inked, care to be taken by service providers engaged in providing taxable services, to renegotiate and put in clause that ‘all taxes including service tax as applicable, to be collected extra from the customer’.

The ideal alternatives for on going contracts are as under:

  1. Service Completed before 1.6.2015: All the services provided upto end of May 2015 need to be billed. These would include those bills not raised which have been postponed, missed, other reasons. These are to be identified and bill raised by end of May 2015. Otherwise the 14% rate may have to be applied in future.
  2. Part services provided before 1.6.2015: The part bill to extent of completed service, could be raised before 1.6.2015 and service tax paid thereon by 5th/6th of June 2015 at 12.36%.
  3. Advances received before 1.6.2015 for future services: Even on advances received towards services to be provided in future, invoices to be raised by 30th May 2015 and ST could be paid at 12.36%.
  4. Where the invoices are issued before 1.6.2015: When the invoices are raised before 1.6.15 for services to be provided in future[post June 2015], service tax rate is 14%.

Impact of subsuming cess

FA 2015 has done away with the Cess, both under central excise and service tax. The provisions of Rule 3 of the CENVAT Rules permit utilisation of CENVAT credit of Excise duty/Service tax for payment of Cess but not vice versa. With no Cess on Excise duty/service tax, the manufacturer/service provider will merely accumulate such credit.

There has been a notification no.12/2015-CE(NT) where it has clarified that the ED/SHE cess on inputs/input services/capital goods received on or after 1.3.2015 could be set off to pay excise duty by a manufacturer of final product. Similarly that balance 50% of ED and SHE cess on capital goods received in the factory of manufacture of final product in 2014-15 can be utilized to pay excise duty.

There is no clarity on the past period accumulated credit. A similar issue, could arise under service tax, when cesses are subsumed wef 1.6.2015. Where the customer has substantial accumulated credit could examine legal validity and take a call on set off of such accumulated credit of cess against the service tax payable post 1.6.2015 under intimation to department. It is hoped there would be some clarification issued in this regard.

May 272015
 

TDS deductible on payment to transporter owing more than 10 carriages

You may be aware that hitherto (upto 31.05.2015) no TDS was require to be done from Transport charges paid/ payable if the transporter  furnishes the copy of PAN.

However, as per the amendment effective from 01.06.2015, this exemption will be available only to those transporters who own ten or less goods carriages at any time during the previous year. If any transporter more than 10 carriages then TDS require to be deducted u/s. 194C(6) @1% when :

a) An individual payment to such a transporter is Rs. 30,000/- or more

or

b) The total payments to such a transporter during any Financial year is Rs. 75,000/- or more.
Now, a declaration required to be obtain from every transporter stating that he does not own 10 or more carriages.
A draft of the declaration can be downloaded from the following link
Download

Please note that failure to obtain such a declaration  will result in to contravention of Sec. 194C (6) of the Income Tax Act, 1961.

Courtesy: CA C. Maneklal
May 272015
 

INCOME TAX- For TDS & TCS- Nine Amendments shall be effective from 1st June 2015

1. Requirement for obtaining evidence/ particulars by employer for TDS–Section 192-Prescribed form from employee to be obtained for his claims.

2. TDS from premature withdrawal from Employees’ Provident Fund Scheme (EPFS)–Sections 192A and 197A – Trustees of RPFs shall, at the time of payment of the accumulated balance due to the employee, deduct tax at source at the rate of 10%, where the aggregate withdrawal is R30,000/- or more. Form No. 15G/15H available for non deduction. No PAN- Marginal Rate.

3.TDS from interest (other than interest on securities)–Section 194 N – TDS from Recurring deposit-TDS from deposit in cooperative Banks- Interest from all branches of a Bank is to be considered to check cut off amount of Rs 10000/-

4.TDS from payments to transporters–Section 194C- Exemption will be available
only to those transporters who own ten or less goods carriages at any time during the previous year

5. Obtaining/quoting tax deduction and collection account number (TAN) relaxed for certain notified persons–Section 203A- proposed to amend Section 203A to the effect that the requirement of obtaining and quoting of TAN shall not apply

6. Processing of TCS returns–Section 206CB- Processing of TCS (tax collected at source) statements on the same lines as TDS statements.

7.Self-declaration for non-deduction of tax from life insurance payments–Sections 194DA and 197A- Self-declaration in the prescribed Form No. 15G/15H made applicable.

8.Interest on certain bonds and Government securities earned by FIIs–Section
194LD-Concessional rate of tax is proposed to be extended up to 30th June 2017.

9. Furnishing of information made more stringent and penalty introduced – Sections 195 and 271-I-The obligation to furnish Form 15CA (and also Form 15CB) will have to be complied with. Section 271-I to levy a penalty of R1,00,000/- if the person required to furnish information under Section 195 fails to furnish such information or furnishes inaccurate information.

Courtesy: CA C. Maneklal

May 272015
 

Possible tax planning due to change in service tax rates

We have discussed in detail in our previous article on new Service tax rate becoming effective from June 1, 2015 and how this change in going to change our service tax bill for services already completed or in the process of completion. In this article we will dig it out further this concept in detail and try to find out possibility of planning in terms of applicability of services tax rates.

As we are aware that service tax rates are revised to 14% (including education cess and secondary and higher secondary education cess) from existing rate of 12.36%. Hence, as far as old rates are applicable in your tax invoice, you can save 1.64% of total service value of your client. Here we will discuss the possibility of saving money due to applicability of point of taxation rules.

Services Completed Earlier to 1.6.2015:

Illustrations when old rate would apply

  • Where payment received before and invoice issued after 1.6.2015: The invoice raised on 15th June 2015, and service provided on 20th May 2015. Payment received on 30th May 2015. The service tax to be paid at 12.36%.
  • When the invoice issued before and payment received after 1.6.2015: The invoice raised on 15th May 2015, service provided on 4th May 2015 and payment received on 30th June 2015. The service tax to be paid at 12.36%.

Illustrations when new rate would apply

  • Invoice raised and payment received after 1.6.2015: The invoice raised on 15thJune 2015, and service provided in May 2015. Payment received in June 2015. The service tax to be paid at 14%.

Services Provided Post 1.6.2015:

Illustrations when old rate would apply

  • Invoice raised and payment received before 1.6.2015: If invoice raised on 5th May 2015, service provided in June 2015 and payment received on 15th Then service tax to be paid at 12.36%.

Illustrations when new rate would apply:

  • When invoice raised after 1.6.2015 and payment received before rate change: If invoice is raised on 5th June 2015, service provided in June 2015 and payment received on 15th Then service tax to be paid at 14%.
  • When invoice raised earlier to 1.6.2015 and payment made post change in rate: If invoice raised on 15th May 2015, service provided in June 2015,payment made on 1.6.2015. Then service tax to be paid at 14%.

 2 out of 3 planning:

From the above it can be understood that out of the 3 elements viz. (Date of issue of invoice, Date of payment and date of provision of service) if any of the 2 events occur before the effective date of change in rate, then the old service tax rate shall be applicable.

Conclusion:

Since the new rate is to be effective from June 1, 2015 therefore if any 2 events takes place before that then the benefit of old rate can be taken even after June 1, 2015. Hence, ask your service provider to issue tax invoices before June 1, 2015 for all services completed on or before May 30, 2015 or try to make advance payment to your service provider for services to be completed in near future.

May 262015
 

How to deal with change in service tax rate

New service tax rate of 14% is effective from June 1, 2015. This article is intended to provide you with insights of how to deal with change in rate and which scenarios old rate shall prevail and when a new rate has to be applied. Few of the practical questions posed could be as under:

  • What if invoice is issued before the change of rate but payment is received after the change in rate. Which rate needs to be applied?
  • What should be the rate applied in case service is provided before the change in rate and invoice is issued after the change in rate?
  • What if both invoice is issued and service is provided before the rate change but payment is received after the rate change. Which rate needs to be applied?

As per Section 67A of the Finance Act, 1994 The rate of service tax, value of a taxable service and rate of exchange, if any, shall be taken as the rate/value in force or as applicable at the time when the taxable service has been provided or agreed to be provided.

In order to understand the point at which the service is said to have been provided, it would be relevant to read the definition of Point of Taxation as per Rule 2(e) “point of taxation” means the point in time when a service shall be deemed to have been provided. This implies that one has to go to Point of Taxation Rules, to ascertain as to when the service is been provided to determine the rate of tax as per Section 67A

However the point of agreeing to provide the service cannot be determined as per the point of taxation rules and when as service can be said to have been agreed to be provided, whether on receipt of the advance or on the entering to mere agreement to provide the service can be called as the point of agreed to be provided would be an area, which could lead to varied interpretation and lead to litigation.

Further Rule 4 of Point of Taxation Rules, 2011 lays down guiding principles to identify the point of taxation, i.e. the point when the service is deemed to be provided specifically in case of change in rate of service tax. The initial portion again requires an assumption that the service is provided before the change in rate. This leads to an anomaly, since we are reading rule 4 to understand when the service is deemed to be provided, where as the rule state that if the service is provided before/after the change in rate, which has not been clarified.

The reference of service being provided before/after the change in rate needs to be understood in common parlance, which may be considered as completion of the service (delivered all the deliverable of a service contract) and if the same is continuous supply service, then the same can be considered as to that extent of the service which has been provided upto the agreed mile stone.

Discussed below are various changes and its treatment in a tabular form for ease of understanding:

Service completed Invoice issued Payment received Rate to be considered.
Before the change in rate of tax After the change in rate of tax After the change in rate of tax 14%
Before the change in rate of tax Before the change in rate of tax After the change in rate of tax 12.36%
Before the change in rate of tax After the change in rate of tax Before the change in rate of tax 12.36%
After the change in rate of tax Before the change in rate of tax After the change in rate of tax 14%
After the change in rate of tax Before the change in rate of tax Before the change in rate of tax 12.36%
After the change in rate of tax After the change in rate of tax Before the change in rate of tax 14%

From the above we can understand that there are 3 events as under:

  • Date of provision of service;
  • Date of issue of invoice; and
  • Date of payment.

Anomaly in existence:

On interpretation of Section 67A, which is supreme to the rule the rate needs to be adopted when the service was provided and the receipt of the consideration and the raising of invoice is irrelevant for this purpose, however Rule 4 of the POTR, 2011 states 2 out the three events which was discussed in our previous article shall be relent to determine the rate of tax.

If one has to go with section 67A then it to be made sure that there is a proper documentation in place to prove the service was provided prior to rate change and also intimate this fact to department. To avoid dispute and one can also examine to issue the Invoice prior to 01.06.2015 for all the completed service.

This situation has arisen perhaps because the POT Rules were notified in 2011 and the Section 67A was inserted in 2012. We may expect some clarification to be issued by the Board in this regard with proper illustrations so that the transition to the new rate is smooth.

In our upcoming article we will discussed above point in detail and further how we can plan of service tax bill make our services more cost effective and competitive.

May 232015
 

Dear All,

Please find the compliance hand book for F.Y. 2015-2016.

Features:

  1. Income Tax
  2. Companies Act
  3. Limited Liability Partnership (LLP)
  4. Service Tax
  5. Excise
  6. Other Compliances
  7. Compliance Calendar
  8. Useful Websites

Download link for Compliance Hand Book (FY 2015-2016)

Sensys Technologies Pvt. Ltd.
http://www.sensysindia.com
Blog site http://www.sensystechnologies.com/blog/

May 222015
 

Revised Service tax rate 14% applicable from June 1: Practical Implication

After the Hon’ble President has given assent to the Finance Bill, 2015 on Thursday, May 14, 2015, the Ministry of Finance, Department of Revenue vide Notification No. 14/2015-ST dated May 19, 2015 has notified increase in the rate of Service tax from 12.36% to flat 14% (Including Education Cess and Secondary & Higher Secondary Education Cess) to be effective from June 1, 2015. The extract of notification is reproduced hereunder:

In exercise of the powers conferred by clauses (a), (c) and (f) of section 107, section 108, sub-sections (2), (3) and (4) of section 109, section 153 and section 159 of the Finance Act, 2015 (No. 20 of 2015), the Central Government hereby appoints the 1st day of June, 2015 as the date on which the provisions of clauses (a), (c) and (f) of section 107, section 108, sub-sections (2), (3) and (4) of section 109, section 153 and section 159 of the said Act shall come into force.”

With the new Service tax rate becoming effective from June 1, 2015, the much debated topic among the Trade on the presently applicable rate of Service tax would definitely come to an end but there are chances of protest being faced by the service provider in respect of the ongoing transactions for which either certain advance payment is received prior to June 1, 2015 but the completion of provision of service may take place post facto thereof or vice versa.

To understand the issues further, it is appropriate here to have an overview of the Point of taxation as governed under the Point of Taxation Rules, 2011 (“the POT Rules”).

With the introduction of the POT Rules,Service tax payment is made on accrual basis in terms of the provisions contained under the POT Rules. The general Rule 3 of the POT Rules stipulates that Point of taxation shall be the earlier one among raising of invoice or date of making the payment. Further, if the invoice is not raised within 30 days(45 days for Banking and financial services) from the date of completion of provision of service, Point of taxation shall be the date of completion of provision of service.

Thus, by applying the provisions of Rule 3 of the POT Rules, the service provider would be liable to pay Service tax on the advance payments received at the prevailing rate of 12.36%. However, the service provider may encounter the issue of adjusting this payment of tax for increase in Service tax rate after wards when the service will be provided and invoice will be raised for the services rendered, for which advance has been received already. This issue is discussed in detail hereunder.

Point of taxation involving change in effective rate of tax is governed by Rule 4 of the Point of Taxation (POT)Rules, which provides for determination of Point of taxation when there is change in effective rate of tax (hereinafter referred as “the change”) as mentioned in the table below:

S. No. Taxable services have been provided Invoice is issued Payment received POT shall be Applicable rate
1 Before the change After the change After the change Date of issuance of invoice or Date of receipt of payment,whichever is earlier 14%
Before the change After the change Date of issue of invoice 12.36%
After the change Before the change Date of payment 12.36%
2 After the change Before the change After the change Date of payment 14%
Before the change Before the change Date of receipt of payment or date of issue of invoice, whichever is earlier 12.36%`
After the change Before the change Date of issue of invoice 14%

 Now based on above discussion, some practical scenario can be resolved as under:

Case No Service rendered Invoice issued Payment Made Tax rate
Case 1 Up to 31.05.15 Up to 31.05.15 Up to 31.05.15 12.36%
Case 2 Up to 31.05.15 After 31.05.15 After 31.05.15 14%
Case 3 Up to 31.05.15 Up to 31.05.15 After 31.05.15 12.36%
Case 4 Up to 31.05.15 After 31.05.15 Up to 31.05.15 12.36%
Case 5 After 31.05.15 Up to 31.05.15 Up to 31.05.15 12.36%
Case 6 After 31.05.15 After 31.05.15 After 31.05.15 14%
Case 7 After 31.05.15 Up to 31.05.15 After 31.05.15 14%
Case 8 After 31.05.15 After 31.05.15 Up to 31.05.15 14%

Thus, problem may be faced by service provider in case advance payment is received but services are actually provided on or after 01.06.15. In this case service provider is liable to collect differential amount of service tax from service receiver and deposit the same to central government.