Reverse charges in service tax

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

24 October 2012 As Per service tax rules w.e.f. 01.07.12

suppose i am partner in producion house (movies). We are getting sponsership services from one business man for the production of movie. my queries are:-

1.how much amount we can take from him without applicability of service tax ?

2. if service tax is applicable then what will be its whole impact ?

3. who is to pay and how much ?
4. what's the accounting entries in this case ?
5. also explain reverse charges in service tax ?
6. what will be the agreement made between partners and sponsers and also let me know while preparing partnership deed is it necessary to show that we will take sponsership services ?

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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24 October 2012 In This Case, Service receipients Need to pay Service Tax Not By Provider.
Whether It is Corporate or Non Corporate.

So In This Case, There is No Limit Since Reverse Charge is Applicable, Even a Single Rupee Will be Chargeable for Service Tax.

https://www.caclubindia.com/experts/reverse-charges-in-service-tax-1129594.asp

Querist : Anonymous

Querist : Anonymous (Querist)

25 October 2012 i tried to find on www.caclubindia.com/experts/reverse change in service tax but did not find plzz help me.

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MOHAMMAD SALIM

MOHAMMAD SALIM (Expert)
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26 October 2012 No limit of amount under RCM.Applicable even if single rupee is paid...

In case of sponsorship entire service tax to be paid by serve recipient...Outflow would be 12.36% of the sponsorship amount was there prior to 01.07.12 also.

Expense head to be booked.

Querist : Anonymous

Querist : Anonymous (Querist)

27 October 2012 THANKS MOHAMMAD SALIM SIR 4 UR REPLY. WE R SERVICE RECIPIENT SO IN THIS CASE WE HAVE TO PAY SERVICE TAX TO THE GOVT BUT MY QUESTION IS THAT WHO WILL RAISE ???

IF WE RAISE BILL THEN WHAT WILL BE THE ACCOUNTING ENTRY AND IS IT NECESSARY TO SHOW WHILE PREPARING PARTNERSHIP DEED THAT WE ARE TAKING SPONSERSHIP IN FORM OF MONEY ???

MOHAMMAD SALIM

MOHAMMAD SALIM (Expert)
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27 October 2012 No bill is required to be raised by service recipient for making payment of service tax under RCM. The tax is to be paid on basis of bill of service provider which would be without service tax.

Relevent expense head need to be used i.e. sponsorship.

No specific need to mention in deed...

Querist : Anonymous

Querist : Anonymous (Querist)

27 October 2012 THANKS SIR, U MEAN SPONSORS SHALL PROVIDE BOTH BILL AND MONEY TO ME AND I JUST HAVE TO DEPOSIT SERVICE TAX BUT MONEY RECEIVED FROM SPONSORS WOULD NOT BE EXPENSE FOR ME I THINK IT WOULD BE INCOME 4 ME........PLZ CLEAR ALL THINGS..........WHAT WILL BE THE ENTRY PASSED BY ME IN CASE OF SPONSORSHIP RECEIVED IN FORM OF MONEY.

Querist : Anonymous

Querist : Anonymous (Querist)

30 October 2012 DEAR MOHAMMAD JI PLZZZZZ REPLY

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MOHAMMAD SALIM

MOHAMMAD SALIM (Expert)
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30 October 2012 If you are providing sponsorship services then you need not worry about depositing service tax. The service tax shall be depsoited by the service recipeint directly to the Govt.

Querist : Anonymous

Querist : Anonymous (Querist)

31 October 2012 sir ji we are receipient of sponsership service in this case who will raise bill either by receipient of sponsership or provider of sponsership and give me bill format whether service tax should be included in the bill.