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Service consumed in June, billed in July to attract GST

Consumers will have to cough up GST on bill payment for credit card, telephone or any other service consumed in June if the invoice for the same has been generated or payment made in July.

Goods and Services Tax (GST) has been rolled out from July 1, and most of the services attract a higher tax slab of 18 per cent compared to around 15 per cent service tax charged earlier. GST replaces service tax, excise, VAT and over a dozen local levies. All goods and services are now classified under four tax slabs of 5, 12, 18 and 28 per cent.

However, a government official clarified GST would be levied on any bill that is generated from July 1 even if the service has been consumed prior to that, provided that no advance payment was made by the consumer. "Supposing your billing cycle ended on June 25, invoice was generated on July 10 and payment was not made in advance... So when you issue invoice the liability is of GST because under law the date of providing of service is the date of issue of invoice," a senior tax official said.

Under existing rules, service tax is levied on the date of issue of invoice or date of making of payment, whichever is earlier. Invoice for services has to be generated within 30 days of providing the service

In case a consumer pays the bill in advance, then the rule says tax liability arises on that day. For goods, the law states that the day an invoice is issued will be considered as the date of goods sold and tax would be charged.

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