Reverse mechanism of service tax

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Siddharth Nanda (Querist)
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25 August 2012 Dear Sir,

Please do clarify my following querries.

1. What are the service tax code for depositing service tax under Reverse Mechanism for following services?
a)Ditrector sitting fee in Board Meeting?

b)WCT contract?

c)Advocate for legal consultancy?

2. What are the formalities for not adhering to the guidelines under this mechanism?

Regards

CA Suresh Jain

CA Suresh Jain (Expert)
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26 August 2012 w.e.f. 01.07.2012 only one accounting code is applicable as under :-
for tax collection
Name of Services

Accounting codes

Tax collection

Other Receipts

Penalties

Deduct refunds

All Taxable Services

00441089
Q2 is not clear

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RENGARAJ R.K

RENGARAJ R.K (Expert)
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26 August 2012 Yes. Only one accounting code for all taxable service. But, use individual challan for reverse charge services. For e.g, advocate fees, separate, wct separate and director fees etc., Because, the same challan is treated as cenvat document for claiming the input tax benefit. so, if any of reverse charge is not eligible for e.g wct you can avail cenvat on the other two challans to set off in the output tax.

Regarding query no 2, it is not clear.

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Pralay Chakraborty

Pralay Chakraborty (Expert)
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27 August 2012 Accounting codes for the purpose of payment of service tax under the Negative List approach, with effect from 1st July, 2012 is as follows:

For all Taxable Services Accounting codes are:

Tax collection : 00441089
Other Receipts:00441090
Penalties: 00441093
Deduct refunds: 00441094

NOTE:

(i) service specific accounting codes will also continue to operate, side by side, for accounting of service tax pertaining to the past period (meaning, for the period prior to 1st July, 2012);

(ii) Primary Education Cess on all taxable services will be booked under 00440298 and Secondary and Higher Education Cess on all taxable services will be booked under 00440426;

(iii) a new sub-head has been created for payment of “penalty”; the sub-head “other receipts” is meant only for payment of interest etc. leviable on delayed payment of service tax;

(iv) the sub-head “deduct refunds” is not to be used by the assessees, as it is meant for use by the Revenue/Commissionerates while allowing refund of tax.

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Siddharth Nanda

Siddharth Nanda (Querist)
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27 August 2012 My 2nd question was "what is the penalties for not depositing service tax under reverse mechanism?

Pralay Chakraborty

Pralay Chakraborty (Expert)
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27 August 2012 Not depositing the Service Tax under any mechainsm attract an interest payment @ 18% PA.

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