What will happen if the effective rate of service tax changes before or after rendering of a service [rule 4]

When there is a change in effective rate of service tax in respect of a service, the point of taxation shall be determined in the following manner:

Case 1: Where a taxable service has been provided before the change in effective rate of tax

	Situation	Point of Taxation	Rate of service Tax
1	Invoice issued after change in rate  Payment received after change in rate	Date of payment or the date on which the invoice has been issued, whichever is earlier	New rate
2	Invoice issued prior to change in rate Payment received after change in rate	Date on which the invoice has been issued	Old rate
3.	Payment received before change in rate  Invoice issued after change in rate	Date when the payment has been received	Old rate

 Case 2: Where a taxable service is provided after the change in effective rate of tax

	Situation	Point of Taxation	Rate of service Tax
1	Payment received after change in rate  Invoice issued prior to change in rate	Date of payment, even though the payment is subsequent to date of invoice	New rate
2	Invoice issued before change in rate Payment received before change in rate	Date when invoice was issued or the payment was received, whichever is earlier	Old rate
3.	Invoice issued after change in rate Payment received before change in rate	Date on which the invoice is issued even though the payment is received before the date of invoice	New rate

 Note: If any two of the following three events take place before the change in the effective rate of tax, the old rate of service tax shall apply:

1. Date of taxable service provided
2. Date of invoice
3. Date of payment