Reverse charge
This query is : Resolved
23 October 2013
is reverse charge applicable to a body corporate only?
23 October 2013
it is applicable to body corporate as well.depending upon the case proportion of ST to be paid may differ.
For instance in case of manpower service-
if SP and SR are body corporate then ST to be paid as 100 % & Nil by SP & SR
If SP is other than body corp.(individual ,firm etc) and SR is Body corporate then ST to be paid as 25% & 75& by SP & SR
For instance in case of manpower service-
if SP and SR are body corporate then ST to be paid as 100 % & Nil by SP & SR
If SP is other than body corp.(individual ,firm etc) and SR is Body corporate then ST to be paid as 25% & 75& by SP & SR
23 October 2013
if SP is not reg for ST wat vil b the effect?
23 October 2013
see service provider having turnover of more than 9lacs has to obtain registration in general.Service reciever under reverse charge has to obtain registration irrespective of turnover.
failure may lead to fine of 200/day of default or rs10000 whichever higher.
Further ,other consequential penal provisions may also become applicable.
failure may lead to fine of 200/day of default or rs10000 whichever higher.
Further ,other consequential penal provisions may also become applicable.
Message likes :
1 times
23 October 2013
Excellent and clear answer by the expert. Fully agree.
23 October 2013
Thankyou Ramaswamy sir
24 October 2013
if 10,000 is the value payable by the Service receiver can we take this amt as inclusive of ST under reverse charge?
24 October 2013
If service tax amount is not separately shown then it is assumed whatever is recieved ,it is inclusive of service tax
Message likes :
1 times
25 October 2013
my doubt is wether we account ST as an exp in the books of service receiver? or we just deduct the ST amt from the bill payable to service provider and deposit it to the govt?
28 October 2013
my doubt is wether we account ST as an exp in the books of service receiver? or we just deduct the ST amt from the bill payable to service provider and deposit it to the govt?
29 October 2013
As far as Manpower Supply Service is concerned, RCM is applicable if the service provider is a non corporate body and the service recipient is a body corporate in the ratio of 25% and 75% respectively.
RCM is applicable even if the SP is not registered as SP. The prescribed tax invoice should show the consideration for service, reimbursement of expenses and the ST amount separately. If the ST is not shown separately, it maybe due to the fact that the SP being a SSP is not registered.
As a matter of abundant caution calculate the ST on the invoice amount and pay 75% thereof.
In the books of SR the invoice amount should be paid in full, if the ST is not shown separately i.e in your case Rs.10,000 should be paid to SP.
ST amount will work out to Rs.1236 of which you as SR will pay Rs.927 in cash in addition to the payment made ti SP. You can claim input credit of Rs.927 on the basis of the GAR - 7 Challan which will be treated as the Input document as per Rules.
RCM is applicable even if the SP is not registered as SP. The prescribed tax invoice should show the consideration for service, reimbursement of expenses and the ST amount separately. If the ST is not shown separately, it maybe due to the fact that the SP being a SSP is not registered.
As a matter of abundant caution calculate the ST on the invoice amount and pay 75% thereof.
In the books of SR the invoice amount should be paid in full, if the ST is not shown separately i.e in your case Rs.10,000 should be paid to SP.
ST amount will work out to Rs.1236 of which you as SR will pay Rs.927 in cash in addition to the payment made ti SP. You can claim input credit of Rs.927 on the basis of the GAR - 7 Challan which will be treated as the Input document as per Rules.
01 November 2013
if i dnt hav any output service then how can i claim input credit? can this 927 be deducted from the 10000?
03 November 2013
No. Service Tax is in addition to the remuneration paid. If the SP has billed you Rs.10,000/-, it is assumed that your contract for services received was of Rs.10,000/-. Service Tax is more akin to VAT than Income Tax. Whereas Income Tax on the payment due to contractor is deducted from his bill and paid to the credit of central government, service tax cannot be deducted from the billed amount, which has to be paid in full. Since the invoice is silent on the tax amount, in case of RCM services one has to proceed on the assumption that the SP is unregistered. Even in that case the liability of the SR has to be discharged - this is the position as per law.
05 November 2013
so SR has to pay ST from own pocket & therefore the same is an exp. right?
05 November 2013
if SP is a body corporate dosent hav reg for ST & SR is another body corporate having reg for ST will reverse charge applicable in this case?
07 November 2013
Your observation is right. ST paid by the SR is an expense and out of pocket.
Reverse charge does not apply if both the SP and SR are bodies corporate. In that case the liability for payment of ST is solely on the SP and the SR need not worry whether the SP is registered or not. If no ST is charged then no ST is paid by the SR and he will not be eligible to claim any input CENVAT credit.
Reverse charge does not apply if both the SP and SR are bodies corporate. In that case the liability for payment of ST is solely on the SP and the SR need not worry whether the SP is registered or not. If no ST is charged then no ST is paid by the SR and he will not be eligible to claim any input CENVAT credit.
07 November 2013
thank you sir
08 November 2013
can a manufacturing co paying ST under reverse charge claim cenvat credit against their Excise duty liability?
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Refund of AY 22-23
- HSN Details in IFF/GSTR-1 & in GSTR 9
- Tax on capital gains revoked us 54f
- Should I include march foreign salary received in April in my income for FY 2023-24?
- TDR receipts for agreement holder
- Inventory of finished goods
- Sale of property furniture sale
- Disallowance of Section 43B(h) to sez units
- GST APPLICABILITY ON POLLUTION CHECK SERVICE
- Applicability of Ind As to associate of associate
- Refund AY 2012-13 and 2013-14
- DIRECT TAX CODE 2025
- MODEL FILLED AUDIT REPORT FOR TRUSTS IN FORM 10B
- 115TD on cancellation of 12A 80G Registration
- MIS MATCH OF INVOICE NUMBER
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- CASE INTIMATION OF LIABILITY UNDER SECTION 73(5)(Rule 142(1A)
Trending Online Classes
CAclubindia
