Rcm on work contract

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 January 2016 Dear sir, A work contract is covered RCM but service provider is not registered under ST because his turnover is below 10 lacs.. plz let me know as service provider is not registered under Service tax then who will pay his 50% ratio... Regard Nisha Bansal

Ankur Singhal

Ankur Singhal (Expert)
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06 January 2016 Service receiver need to be get registered under service tax even if his turnover is below 10 lakh as there is no SSI exemption benefit available to service receiver.
Also ST under RCM has to be by receiver irrespective of its sales value.

Querist : Anonymous

Querist : Anonymous (Querist)

06 January 2016 sir many thanks for your valuable reply, in above case service receiver is company which is already resistered in ST however the service provider (individual) turnover is below 10 lacs hence he is not registered in ST although as it is work contract covered RCM therefore both are liable liable to pay 50%, 50% ST, my query is... as service provider is not registered in ST then who who will pay his 50% ratio...

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Ankur Singhal

Ankur Singhal (Expert)
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06 January 2016 Dear Nisha
The service provider in this case is eligible to claim SSI exemption.
Hence not required to pay st on the 50%.

Querist : Anonymous

Querist : Anonymous (Querist)

06 January 2016 sir, does that means No one will pay his 50% ST and the dept. will accept this....

Ankur Singhal

Ankur Singhal (Expert)
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06 January 2016 Dear
Here the receiver has paid 50% his liability.
Now the provider is liable to pay for the rest 50%. but he is eligible to avail SSI notification. hence he is exempted to pay ST.
the deptt will definately accept this.

Querist : Anonymous

Querist : Anonymous (Querist)

06 January 2016 thanx a lot sir..