Quick answers to short question on reverse charge
This query is : Resolved
16 December 2013
What is Reverse Charge Mechanism?
Answer:Generally service tax is payable by the service provider.But under reverse charge the service tax is paid either solely by the service receiver or by both i.e. the service provider and the service receiver.Section 68(2) says that in respect of specified services(specified by notification 30/2012) service tax shall be paid by the service receiver at rates prescribed by Section 66 i.e @ 12.36%.
Is it necessary for service receiver to register under Service Tax?
Answer:Yes ,as per Section 69 every person who is liable to pay service tax shall register themselves with the service tax authority.As service receivers are liable to pay service tax they are required to get registered also.
Can Service receiver claim the Small Service Provider Exemption?
Answer:No,the service receiver cannot take the SSp exemption as the same is available only to service providers and not to service receivers.Also Notification 33/2012 supports the same.
If the Service Provider is a SSp,then also is service receiver liable to pay service tax?
Answer:Yes,the liability of service receiver is independent from that of service provider.Even if the service receiver doesnot charge the service tax in its bill, the service receiver has to pay service tax if the specified service falls underReverse charge.
When does the service receiver liability arises?
Answer:As per Rule 7 of Point Of Taxation Rules 2011,point of taxation in case of service receiver shall be the date on which of payment is made to service provider.
When is service tax required to be paid?
Answer:As per Rule 6 of Service Tax Rules ,1994 Service tax is required to be paid by 6th of the day of the month immediately following the month in which the liability arises,if duty is deposited electronically otherwise 5th of the month.
Can service receiver adjust the cenvat credit while paying service tax under reverse charge?
Answer:No, as the explanation to the Cenvat Credit Rules 3(4) cenvat credit cannot be used for payment of Service tax in respect of services where the person liable to pay is the service receiver.
Answer:Generally service tax is payable by the service provider.But under reverse charge the service tax is paid either solely by the service receiver or by both i.e. the service provider and the service receiver.Section 68(2) says that in respect of specified services(specified by notification 30/2012) service tax shall be paid by the service receiver at rates prescribed by Section 66 i.e @ 12.36%.
Is it necessary for service receiver to register under Service Tax?
Answer:Yes ,as per Section 69 every person who is liable to pay service tax shall register themselves with the service tax authority.As service receivers are liable to pay service tax they are required to get registered also.
Can Service receiver claim the Small Service Provider Exemption?
Answer:No,the service receiver cannot take the SSp exemption as the same is available only to service providers and not to service receivers.Also Notification 33/2012 supports the same.
If the Service Provider is a SSp,then also is service receiver liable to pay service tax?
Answer:Yes,the liability of service receiver is independent from that of service provider.Even if the service receiver doesnot charge the service tax in its bill, the service receiver has to pay service tax if the specified service falls underReverse charge.
When does the service receiver liability arises?
Answer:As per Rule 7 of Point Of Taxation Rules 2011,point of taxation in case of service receiver shall be the date on which of payment is made to service provider.
When is service tax required to be paid?
Answer:As per Rule 6 of Service Tax Rules ,1994 Service tax is required to be paid by 6th of the day of the month immediately following the month in which the liability arises,if duty is deposited electronically otherwise 5th of the month.
Can service receiver adjust the cenvat credit while paying service tax under reverse charge?
Answer:No, as the explanation to the Cenvat Credit Rules 3(4) cenvat credit cannot be used for payment of Service tax in respect of services where the person liable to pay is the service receiver.
16 December 2013
Annu Ji.
Request you to also post the same in article/Forums so that a larger audience can read it.
Request you to also post the same in article/Forums so that a larger audience can read it.
16 December 2013
Nikhil Ji,i tried submitting my articles but every time they go for moderation which keeps them pending for so long.So i found this a better way instead:-)
16 December 2013
Well the audience is much less here and it becomes stale even after 2 days as no one looks at solved queries.
17 December 2013
Or post it in share files and forum for better viewing by many.
all the best.
all the best.
17 December 2013
Thanks .Will do that also.
Regards
Regards
17 December 2013
You are welcome and you are doing very good work all the best.
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