Reverse charge mechanism

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

21 September 2012
We are provider of works contract service . We sub contract some of our works ( only labor no material is involved ) whether service tax is applicable to us as per the new Reverse Charge Mechanism ? What is the rule applicable if the sub contractor is un registered ? what is the rate of tax applicable ? please guide us

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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21 September 2012 First of all what you are sub contracting is not a works contract service. it will be charged to service tax.
If the subcontractor is not liable for service tax because of small service provider then you are not liable under reverse charge.
Service tax will be charged, if applicable to him, @12.36%

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Querist : Anonymous

Querist : Anonymous (Querist)

25 February 2013 As an awarder how can I assure that my sub contractor is un registered ?
What proof we have to demand for proving that he is un registered because of small service ?

If the contractor is un registered but he is having required turnover for service tax registration in that situation whether any tax liability is applicable on the awarder ?

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