Reverse charge of service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 August 2013 Dear Expert,

what is reverse charge of service tax & it is applicable of which kind of services. can we take reverse charge tax cenvat credit on other services service tax liability.

thanks in advance.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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12 August 2013 1. Reverse charge service tax concept is the payment of tax by the service receiver directly to the Government instead of giving to service provider, normal course service provider collect the service tax from service receiver and pay to government, but reverse charge, service tax directly pay to government

2.List of services covered under Revers charge

Services of insurance agent
Services of Goods Transport Agency (GTA) of goods transport
Sponsorship service
Services of Arbitral Tribunal
Legal Services of Advocate or Advocate Firms
Services of director to company

Support Services by Government or Local Authority excluding renting of immovable property and services specified in clauses (i), (ii) and (iii) of Section 66D(a) of Finance Act, 1994 (These cover postal, port, airport and railway services)

Renting or hiring of motor vehicle designed to carry passengers to any person who is not in the similar line of business

Supply of Manpower for any purpose or security service
Service portion in execution of Works Contract
Services received from non-taxable territory

3. Yes. service tax paid on Reverse charge can be taken as cenvat, but the same cenvat cannot be used for payment of service tax under Reverse charge, in other words Service tax under reverse charge need to pay by cash/bank only

Querist : Anonymous

Querist : Anonymous (Querist)

12 August 2013 Dear Sir,

Can you please explain your 3rd point with example.

thanks in advance

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CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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12 August 2013 If you are paying any service tax under reverse charge, that you can take credit and adjust with your normal service tax liability , cannot adjust with your service tax liability under reverse charge method

suppose you are providing some service and paying service tax, and also receiving service under reverse charge any paying service tax, what ever you are paying service tax under reverse charge can be adjusted with your normal service tax liability not for service tax liability under RCM

Querist : Anonymous

Querist : Anonymous (Querist)

12 August 2013 Thanks a lot Sir..

Ganeshbabu K

Ganeshbabu K (Expert)
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12 August 2013 Please refer below website which will helps you alot

http://www.dateyvs.com/service-tax/person-liable-to-pay-service-tax-and-reverse-charge/reverse-charge-in-service-tax/