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Punjab Sales Tax on Services Act, 2012 QUESTION #2576
Question 1
Under section 9(1), when a service is provided over a period of time with periodic payments, how is the service treated for tax purposes?
  • As a single service taxable at the date of first payment
  • As comprising two or more separate and distinct services, each corresponding to the part of the service to which each separate payment relates✔️
  • The entire service is taxable when the contract is signed
  • Tax is chargeable only upon final completion of the service
Correct Answer Explanation
Section 9(1) treats periodically paid services as COMPRISING TWO OR MORE SEPARATE AND DISTINCT SERVICES, each corresponding to the part to which each separate payment relates. However, section 9(2) clarifies this does NOT apply to services paid on installment basis.