A mega exemption notification which covered a service was removed and thus became taxable from 1-3-2016. One service provider rendered the service on 20-2-2016 and received the payment on 27-2-2016. The invoice however w

CS Executive · Tax Laws and Practice · PYQS · June 2017
A mega exemption notification which covered a service was removed and thus became taxable from 1-3-2016. One service provider rendered the service on 20-2-2016 and received the payment on 27-2-2016. The invoice however was raised on 18-03-2016. The value of service is ₹ 1,00,000 and the service tax rate is 14.5%. The service tax liability is:
(A) Nil since service was rendered before it became taxable
(B) Nil since service was rendered and invoice was raised before it became taxable
(C) Taxable since invoice was raised after 14 days and the lability is ₹ 14,500
(D) Not taxable since the amount was received before the service became taxable

Answer & Explanation:

Correct Answer: Option (C)

Official answer key: (C).

Topics: Service Tax

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