22 June 2016
If service provider is Individual, HUF, proprietary firm, partnership firm or AOP located in taxable territory and service receiver is a business entity incorporate as body corporate located in taxable territory; Reverse charge mechanism will apply.
If service receiver is located in non taxable territory or charity or non profit organization, government;reverse charge mechanism will not apply.
Under reverse charge, service receiver is liable to pay service tax on 100% of the value and service provider is not liable to charge or pay service tax to government. ( Changes in budget 2015) . Service tax on manpower supply is covered under full reverse charge mechanism. Now service Tax 14%+Swachh Bharat Cess 0.5%+Krishi Kalyan Cess 0.5%=15% appliaclble
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