Please let me know as per the below Questions ? 1. A contractor working with us with out registration of Service Tax (Non service tax holder) but his current work done/Income is above 10L in this FY 15-16 .Kindly let me know what is the deductions or any other rules to convey the contractor.
29 March 2016
In case the services are rendered by a contractor as labour contractor and the recipient is a body corporate under the Reverse Charge Mechanism, you are to deposit 100% of the service tax due irrespective of whether the service provider charges you or not.
In case the services provided are covered under Works Contract Service, again the service recipient is not concerned with the actions of the service provider. Under Works Contract Services, the service recipient is liable to pay 50% of the Service Tax due under Reverse Charge Mechanism. This would amount to 20% or 35% of the invoice amount depending on whether the service is for Original Works or Other Works.
29 March 2016
In any case the service recipient need not worry about the liability of the service provider, nor is any duty cast on him by any statute or notifications.