10 December 2013
1)The small service provider exemption of ` 10 lakhs not available when tax is payable under reverse charge.
2)Cenvat credit cannot be used to pay tax by service receiver. Service tax as to be paid by cash only i.e. GAR-7 challan.
3)Once paid, Cenvat credit can be taken if otherwise it is his eligible ‘input service’.
4)Tax should be paid under service tax registration number of service receiver and included in his return as he is liable to pay service tax.
5)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.
6)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.
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