05 May 2014
We are a limited company. we are service receiver from an individual or sole propretor under the category rent-a-cab. Some of them are charging ST @ 4.944% and some of them are not charging any service tax.
Those who have not charged, we, as a service receiver are liable to pay service tax to Government on 40% of the bill value @ 12.36%, which comes to 4.944%.
Are we required to pay service tax to the Service providers, who have charged service tax in their bills @ 4.944%, or are we required to pay the service tax directly to the Government instead of paying it to the service provider?
05 May 2014
Please note that under reverse charge mechanism, as a service reciever, you have to pay your portion of service tax to the Government whether the service provider has charged service tax full or part or nil. It doesnt effect your status. Once you have received service where reverse charge is applicable, you have to remit your % even service provider is under threshold limit. Hope, this clarified your doubt.
CAclubindia
