My query is on the matter that, if a service provider provides a service under full reverse charge, is he required to take registration as service provider for such a service eg. sponsorship?
If yes, then should it be shown in ST-3 and if not, do we avail exemption under Notf 30/2012 simply?
11 April 2013
No, registration will not be required if provider is providing only a service on which 100% tax is provided by service receiver under reverse charge.
Kindly enlighten me on the second part of second question. Then we don't have to reflect that in ST-3?
RCM is applicable when this 100% ST is payable by service receiver who is a corporate entity. What if such service is provided to non corporate entity?
30 May 2013
Negative List & Reverse Charge & Service Tax Provisions effective from 1st July 2012
Taxation of Services on all services other than those covered under Negative List and the Reverse Charge Mechanism as provided vide Finance Act 2012 would come into force with effect from 1st July 2012. The services are now taxable as per Section 65B which has been inserted w.e.f.1st July 2012 in the Finance Act, 1994.
Notification No. 19/2012-Service Tax dated 5th June, 2012 has been issued in exercise of the powers conferred by clauses (C), (F), (G) and (I) of section 143 of the Finance Act, 2012 (23 of 2012), by which the Central Government has appointed 1st day of July, 2012 as the date from which the provisions of clauses (C), (F), (G) and (I) of Section 143 of the Finance Act shall come into force.
Clause( C) inserts Section 65B, Clause(F) inserts Section 66B,66C,66D,66E,66F, Clause(G) inserts Section 67 A, Clause(I ) inserts Proviso under Section 68 which provides that the Central Government may notify the service and the extent of service tax which shall be payable by such person and the provisions of this Chapter shall apply to such person to the extent so specified and the remaining part of the service tax shall be paid by the service provider.
The power to notify the service for payment of service tax partly by service receiver and partly by service provider has been granted to Government w.e.f. 1st July 2012; but the Notification No.15/2012-Service Tax has been issued on 17.3.2012 with remarks that “This notification shall come into force from the date on which section 66B of the Finance Act, 1994 comes into effect”
But the Government has jumped the gun too early by issuing the Notification on 17.3.2012 when it did not have the powers to notify in this regard. The levy of reverse charge itself can be challenged in High Court on this ground.
The extent of service tax payable by the person who receives the service and the person who provides the service for the specified taxable services shall be as under:
Sl.No.
Description of a service
Percentage of service tax payable by the person providing service
Percentage of service tax payable by the person receiving the service
1
Service by insurance agent to any person carrying on insurance business
Nil
100%
2
services provided or agreed to be provided by a goods transport agency in respect of transportation of goods by road
Nil
100%
3
services provided or agreed to be provided by way of sponsorship
Nil
100%
4
services provided or agreed to be provided by an arbitral tribunal
Nil
100%
5
services provided or agreed to be provided by individual advocate
Nil
100%
6
services provided or agreed to be provided by way of support service by Government or local authority
Nil
100%
7
(a) renting or hiring any motor vehicle designed to carry passenger on abated value. (b) renting or hiring any motor vehicle designed to carry passenger on non abated value.
Nil
60%
100 %
40%
8
services by way of supply Of manpower for any purpose
25%
75 %
9
works contract service
50%
50%
10
in respect of any taxable services provided or agreed to be provided by any person who is located in a non-taxable territory and received by any person located in the taxable territory
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