Reverse charge

This query is : Resolved

Hitesh Choudhary (Querist)
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21 June 2013 Im a body corporate and i am receiving man power services and liable under reverse charge. Suppose value of service is rs. 100 now if service provide is charging service tax on Rs. 100 instead of Rs. 25 than what is my liability. What will be my liability under reverse charge be discharged?

Ganeshbabu K

Ganeshbabu K (Expert)
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21 June 2013 1)Legal liability is of service receiver.

2)That liability does not disappear even assuming that the service provider has paid the service tax.

3)The department can insist on payment of service tax from you.

4)In respect of past, may be you can get away by claiming that it is only procedural mistake and no revenue loss. However, for future, please do not do it.

Thanks & regards
Ganesh babu k

CA Priti Surana

CA Priti Surana (Expert)
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21 June 2013 Mr. hitesh Choudhary, Though the liability is yours to pay service tax on 75% of the bill amount, yet the provider is discharging the liability. See if the receiver is liable to pay service tax under reverse charge, the burden can not be shifted to the provider. Still in your case revenue loss to the govt. is not occurring.

As Mr. Ganesh has written, you may be asked to pay service tax again, but u can contend on this ground. keep with you the invoices that charged 100% sr. tax and challans for payment of the same by the service provider for the reference of dept people and start paying tax on 75% yourself right from now.

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Ganeshbabu K

Ganeshbabu K (Expert)
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21 June 2013 yes..safe side you get a certificate from the service provider that service tax collected from you was deposited and also obtain service tax paid challans as a proof

Thanks & regards
Ganesh babu k