05 August 2016
How to make the payment of service tax under Reverse Charge Mechanism? What code do we select? We have to make payment for import of service. Kindly guide. Thanks
09 August 2024
To make the payment of Service Tax under the Reverse Charge Mechanism (RCM) for services such as import of services, follow these steps:
### **Steps to Make Payment under RCM:**
1. **Determine the Taxable Amount:** - Calculate the Service Tax payable based on the taxable amount of the service received under RCM. This is generally the amount specified in the invoice or the value of the service as per the applicable rules.
2. **Use the Correct Payment Code:** - When making the payment, you need to select the appropriate payment code for service tax under RCM. For payment of service tax on services received under RCM, use the following codes: - **Service Tax (for services under RCM)** - **Code for "Payment under Reverse Charge Mechanism (RCM)":** `RCM` - For specific details, check the payment codes listed in the Service Tax Payment Challan (GAR-7).
3. **Generate Payment Challan:** - Go to the [CBEC-GST portal](https://cbec-gst.gov.in/) or the [GST Portal](https://www.gst.gov.in/) and generate a challan for the payment. - **Service Tax Payment Challan (GAR-7):** For service tax payments including those under RCM. - **Select:** “Payment of Service Tax under Reverse Charge” from the options available in the challan.
4. **Fill Challan Details:** - **For Service Tax:** Enter the details such as the amount of tax to be paid, name of the service provider, and other relevant details as required. - **For RCM:** Ensure that you specifically select the RCM option for payment.
5. **Make the Payment:** - After filling out the challan, submit it for payment. You can make the payment through the following modes: - **Online Payment:** Directly through the bank's online payment gateway. - **Physical Payment:** At a designated bank branch or through the bank’s branch that is authorized for tax payments.
6. **Obtain the Acknowledgment:** - Once the payment is successfully made, you will receive an acknowledgment receipt. Keep this receipt as proof of payment.
7. **File Service Tax Return:** - Ensure that the payment is accurately reflected in your service tax return. File the service tax return in the specified form (e.g., ST-3) and include details of the payment made under RCM.
### **Points to Note:**
- **GST Registration:** Ensure that your GST registration is active, as the process might vary slightly under GST compared to the old service tax regime. - **Timeliness:** Payments under RCM should be made on or before the due date of filing the return to avoid interest and penalties. - **Documentation:** Maintain records of all relevant documents including challans, payment receipts, and correspondence related to the services under RCM.
### **Reference for Payment Codes:**
- **CBEC-GST Portal:** Check for the latest payment codes and instructions on the [CBEC-GST website](https://cbec-gst.gov.in/). - **GST Portal:** For detailed instructions on how to make the payment and file the return, visit the [GST Portal](https://www.gst.gov.in/).
By following these steps, you can correctly make payments under the Reverse Charge Mechanism and comply with the applicable regulations.
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