Point of Taxation Rules, 2011


Point of Taxation Rules was applicable w. e.f 1st April, 2011. These rules were introduced to convert the 
service tax payment system from ‘payment basis’ to ‘accrual basis’. Before 1st April 2011, the Input of 
service tax can be claimed only after making the payment and similarly the service tax payment liability 
arise only after receiving the payment. This will increase the accounting work and complexity in 
maintaining the records. Further this system is not consistent with the excise and VAT laws. To bring the 
consistency among the various laws and to facilitate the implementation of GST the Point of Taxation 
rules were introduced. The brief the applicable rules as on date is as under:- 
Rule 1 : Short title and Commencement. 
Rule 2 : Definitions 
Rule 2A : Date of payment 
Rule 3 : Determination of point of taxation 
Rule 4 : Determination of point of taxation in case of change of rate of tax 
Rule 5 : Payment of tax in cases of new services 
Rule 6 : Omitted 
Rule 7 : Determination of point of taxation in case of specified services or persons 
Rule 8 : Determination of point of taxation in case of copyrights, etc 
Rule 8A : Determination of point of taxation in other cases. 
Rule 9 : Transitional Provisions 
Rule 10 : Notwithstanding anything contained in the first proviso to rule 7 

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