16 October 2016
I am providing services of Manpower Recruitment to Company and I am Individual so This service would be covered under RCM. My Question is How It will be deal in Service tax return. Whether I need to show amount of service as Gross Taxable amount and then Shows same amount in front of Zero tax rate under rate wise break up
I am providing this service only and to corporate only so no service tax has to be paid by me
03 August 2024
### Handling Service Tax for Manpower Recruitment Agency Services Under Reverse Charge Mechanism (RCM)
As an individual providing manpower recruitment services, and considering the Reverse Charge Mechanism (RCM) applies, here’s how you should handle it in your service tax return:
Under the RCM, the service recipient (in this case, the company receiving the manpower recruitment services) is responsible for paying the service tax to the government instead of the service provider.
#### **2. Reporting in Service Tax Return**
Here’s how you should deal with this in your service tax return:
- **Gross Taxable Amount:** - **Report the Total Service Value:** You should report the total amount of service provided as the taxable value in the service tax return. This amount should be included in the gross taxable value.
- **Rate Wise Breakup:** - **Show Under Zero Rate:** Since the service tax is payable by the recipient under RCM, you should indicate the amount in the section for services on which the tax is paid under RCM. You should show the amount against the rate applicable under RCM (which is usually 0% from the provider’s perspective, as the tax is paid by the recipient).
- **Example Reporting:** - **In the Service Tax Return Form (ST-3 or ST-3C),** under the section for reverse charge: - Report the total amount of service provided in the relevant field. - In the rate-wise breakup, show the same amount under the rate applicable under RCM (which could be 0% as you are not liable to pay service tax).
- **No Service Tax Payment by Provider:** - **Confirm the Tax Payment by Recipient:** Since you are not paying the service tax but the recipient is, ensure that the recipient is complying with RCM requirements and paying the tax to the government.
#### **3. **Documentation and Compliance**
- **Maintain Records:** - **Invoices and Agreements:** Keep detailed records of invoices issued to the recipient company and ensure that the service agreement specifies that the recipient is responsible for paying the service tax under RCM.
- **Recipient’s Compliance:** - **Verify Payment:** Confirm with the recipient company that they are correctly accounting for and paying the service tax under RCM.
#### **4. **Service Tax Return Form ST-3:**
- **Particulars to Fill In:** - **Gross Taxable Value:** Report the gross amount received for services. - **Rate and Amount for RCM:** Indicate the RCM rate and the corresponding amount, typically under the field where you report service tax under reverse charge.
#### **Summary:**
1. **Report Total Service Value:** Include the total value of the services in your return. 2. **Indicate RCM:** In the rate-wise breakup, show this amount under the applicable RCM rate. 3. **No Service Tax Payment:** As you are not paying the service tax, confirm with the recipient that they are complying with RCM and paying the tax.
**Always ensure to stay updated with the latest regulations or consult a tax professional for precise compliance and reporting in your specific case.**
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