26 December 2013
IN RCM IF THE SERVICE PROVIDER IS INDIVIDUAL AND HE IS NO SERVICE TAX REGISTRATION, IN THIS CASE RCM TAX HITS SERVICE RECEIVER? HE SUBMITTING THE BILL WITH OUT TAX, CAN SERVICE RECEIVER HAS TO PAY HIS PART TAX?
26 December 2013
service provide can take exemption from payment of service tax but you cannot escape from paying service tax if you are coming under ambit of reversecharge
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.
26 December 2013
In previous service tax provider submits his bill with out tax and we pay him what amount charged in Invoice. If RCM applicable to Service receiver can we ask him to add tax (Receiver portion)to take credit of that tax also he has no service tax registrarion. with out registration number is that ivoice is eligible for take credit?
27 December 2013
@munni . . you are liable to discharge service tax for your part only .. suppose incase of receipt of manpower supply from individual if his turnover not exceeds 10 lakhs he will not collect service tax from you..but as a business entity registered as a body corporate if you received any service from individual you mandatory required to discharge your part of service tax which is 75% in this case .. . Hence 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. . . 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.
Once paid, Cenvat credit can be taken if otherwise it is his eligible ‘input service’.Here you will get cenvat credit on service tax paid to govt. on basis of GAR-7 challan,,
CAclubindia
