Earlier the Point of Taxation had not defined in case of service provided by Government or local authority to any business entity. Now CBDT has amend the Rule 7 of Point of Taxation Rule, 2011 vide Notification No. 24/2016-Service Tax dated 13th April, 2016 and after the third proviso of Rule 7 the following proviso has been inserted.
Rule 7 of Point of Taxation Rule, 2011
Determination of point of taxation in case of specified services or persons
Provided also that in case of services provided by the Government or local authority to any business entity, the point of taxation shall be the earlier of the dates on which, -
(a) any payment, part or full, in respect of such service becomes due, as specified in the invoice, bill, challan or any other document issued by the Government or local authority demanding such payment; or
(b) payment for such services is made.
Notification No. 24 /2016-Service Tax dated 13th April, 2016