06 June 2013
Reverse charge in works contract service:-
1)50% tax by service receiver if service provider of works contract service is individual, HUF, proprietary or partnership firm or AOP
2)AND service receiver is business entity incorporated as body corporate.
3)50% service tax is payable by service provider and 50% by service receiver. The service receiver liable for 50% even if service provider does not charge service tax.
4)Construction, Job work with material, AMC covered under works contract.
Situation is that I have received money in advance for work contract which will be provided after some time. question is that when will service tax be levied on that advance amount of work contract and when it will be paid.
I am service receiver and i will have to pay service tax for works contract under reverse charges mechanism. Question is that can i utilize cenvat credit for payment of above service tax.
1)Service tax is payable by service receiver when actual payment is made to service provider and not on receipt of Invoice from service provider. However, if payment is not made to service provider within 6 months, service tax is anyway payable. Interest is also payable.
2)Exception is that when service provider is outside India is Associated Enterprise (group company with at least 25% common interest), the service receiver is liable to pay service tax as soon as the account of service provider is credited in books of account of service receiver.
20 June 2013
Dear friends Please suggest for the below case: Case -I URGENT
Under Reverse Charge( work contract ), Total service Portion of work contract - Rs.886056 .Question is that Service receiver and service provider will be required to pay service tax on their portion under reverse charge.
CAclubindia
