Even as the Goods and Services Tax (GST) rolled out from July 1, consumers will be liable to pay 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. “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,” Upender Gupta, Commissioner (GST), CBEC, said.
Under GST, the modal rate for services is 18 per cent as against 15 per cent service tax earlier, though input tax credit is being provided on goods being used for supply of services. 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 as per the rule, the 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. Also, to help businesses find the Harmonized System Nomenclature (HSN) code applicable for various commodities under the GST regime, the CBEC has launched a search option on its website by which they can find out the code by just typing the name of the product.