Reverse charge mechanism

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 September 2014 AS A SERVICE RECEIVER (COMPANY) RECEIVED SERVICES OF MAN POWER SUPPLY FROM SERVICE PROVIDER (FIRM). UNDER REVERSE CHARGE MECHANISM IF AS A SERVICE RECEIVER DON'T PAY SERVICE TAX TO THE SERVICE TAX DEPARTMENT. THEN WHO IS LIABLE TO PAY SERVICE TAX UNDER RCM METHOD? DOES SERVICE PROVIDER FULLY PAY THE SERVICE TAX TO THE SERVICE TAX DEPARTMENT?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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09 September 2014 No. Service provider is liable to pay only his portion of Service Tax i.e., 25% provided service recipient is a business entity registered as a body corporate.

Querist : Anonymous

Querist : Anonymous (Querist)

09 September 2014 AS A SERVICE RECEIVER IF I PAY FULL AMOUNT OF SERVICE TAX TO SERVICE PROVIDER SO IS THERE ANY LIABILITY ARISE TO THE SERVICE RECEIVER?

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CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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09 September 2014 If the service recipient has discharged his service tax liability then there will be NO penal action on the service recipient.

Querist : Anonymous

Querist : Anonymous (Querist)

09 September 2014 AS A SERVICE RECEIVER if i PAY FULL AMOUNT i.e.12.36% to service provider and not 3.09% for supply man power is there any liability arise to the service receiver as not pay himself service tax under reverse charge mechanism to the service tax department.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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10 September 2014 If reverse charge is applicable and you have paid the full service tax to the service provider, then you are liable for your part of the service tax.

If the service provider defaults in payment of service tax then service recipient will be held liable.

Querist : Anonymous

Querist : Anonymous (Querist)

11 September 2014 SO BHARDWAJ JI AS PER YOUR REPLY THAT THERE IS NO LIABILITY ARISE IF SERVICE RECEIVER FULL PAY THE 12.36% OF SERVICE TAX TO THE SERVICE PROVIDER. IF SERVICE PROVIDER DON'T PAY SERVICE TAX THEN SERVICE RECEIVER WILL PAY SERVICE TAX TO THE SERVICE TAX DEPARTMENT.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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12 September 2014 1. You should always pay the service tax directly to the Govt in case of reverse charge.

2. If you have paid the same to the service recipient then you should obtain proof of deposit from the service provider.

3. The service provider can still be held liable.

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