29 April 2013
Hi all, If the Service Provider charges 12.36% st on 30% of the total amount...the effective rate of tax would come upto 3.708%. My doubt is should both the service provider and the service receiver should pay 3.708% each( under works contract reverse charge mechanism 50:50) or should it be just 50% of 3.708%? The calculation is as follows:
Total amount of invoice- 465186
Service Tax 12.36% on 30% of Total amount- Rs.17249.10
My question is what would be the amount of ST payable by the service receiver under reverse charge mechanism?
29 April 2013
1ST DO 50 50 OF THE TOTAL VALUE NOW USE THE RULE THAT SR AND SP BOTH CAN TAKE THE ABATEMENT, HENCE SP = 12.36% OF 30% AND SR = 12.36% OF 30% BEACAUSE ABATEMENT IS ON SERVICE AND NOT ONLY FOR SR.
ALSO THE SAME IS SUGGESTED BY CBEC, IN S.TAX EDU GUIDE
CAclubindia
