Exemption limit under reverse charge mechanism

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 October 2012 My client is a private limited company who is going to receive security services from a proprietorship firm. I had told them that if they receive security services from a proprietorship firm, they will have to deposit service tax as service recipient. But they are saying that if they pay aggregate amount not exceeding Rs. 75,000/-, they are exempted from Reverse Charge Mechanism. I wanted to know if they are correct.

MOHAMMAD SALIM

MOHAMMAD SALIM (Expert)
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11 October 2012 no there is no exemption limit under reverse charge. if a service is covered under reverse charge and even if payment of Rs 100 is made that would also be subjected to service tax...