Reverse charge in 194i
This query is : Resolved
08 May 2013
Company hired a car from 'abc' for employees working at site.Here 'abc' is an individual.He didin't levy any service tax in the bill.However The total rent for the whole year exceeded Rs.1,80,000/-..
1)Will reverese charge applies to him even though he is a small service provider i.e., company has to pay 40% of service tax?
2)Does this come under 194I or 194C?
1)Will reverese charge applies to him even though he is a small service provider i.e., company has to pay 40% of service tax?
2)Does this come under 194I or 194C?
08 May 2013
Reverse charge is irrespective of -
1) 194I provisions.
2) Small service provider.
194I or 194C depends on substance of transaction.
1) 194I provisions.
2) Small service provider.
194I or 194C depends on substance of transaction.
Message likes :
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22 June 2013
Applicability of New Reverse Charge Mechanism under Service Tax Law
Dear Professional Colleague,
As the Union Budget has proposed multiple changes in Service Tax in light of Negative List of Services, an important
aspect of burden of tax liability under Reverse Charge concept has also been proposed to be replaced from existing
provisions.
Applicability of New Reverse Charge Mechanism
According to Notification No 15/2012-ST dated 17.03.2012, the proposed Reverse Charge Mechanism will be made
applicable from the date on which Section 66B of the Finance Act, 1994 comes into force. The said Section 66 will come
into force only upon the date when the Finance Bill, 2012 is passed by the Parliament and receives the consent of the
Hon’ble President of India to be called as Act.
Therefore, the new reverse charge mechanism will be applicable from the date when Finance Bill, 2012 is enacted.
Clarification on new reverse charge mechanism in respect of services of Rent –a – cab, Manpower Supply and Works
Contract
Under the new reverse charge mechanism will also be applicable in respect of
a) Rent – a – cab service
b) Manpower power supply service
c) Works Contract service
However, this reverse charge under above mentioned three services will be applicable only if, the service provider
of these 3 services is an Individual or HUF or Proprietary or partnership firm or AOP and the service receiver is a
Company registered under Companies Act, 1956
For details and applicability of new reverse charge mechanism in case of all the services, please refer table below:
Description of a service
Service provider
Service receiver
Percentage of service tax payable by the
person providing service Percentage of service tax payable by the person receiving
the service Insurance Services
in respect of services provided or
agreed to be provided by an
insurance agent to any person
carrying on insurance business
Insurance agent Business man
carrying on insurance business Nil 100
GTA in respect of services provided or
agreed to be provided by a goods
transport agency in respect
of transportation of goods by road
Goods transport agency Consignor or
Consignee is specified person Nil 100
Sponsorship in respect of services provided or agreed to be provided by way of
sponsorship Any person Body corporate or
partnership firm Nil 100
Arbitral Tribunal in respect of services provided or agreed to be provided by an
arbitral tribunal Arbitral tribunal
Business entity Nil 100
Advocate Services in respect of services provided or agreed to be provided by
individual advocate Individual advocate
Business entity Nil 100
Support Service Government Business Nil 100in respect of services provided or
agreed to be provided by way of
support service by Government or local authority entity Rent a Cab Services
(a)in respect of services provided
or agreed to be provided by way
of renting or hiring any motor
vehicle designed to carry
passenger on abated value.
(b)in respect of services provided
or agreed to be provided by way
of renting or hiring any motor
vehicle designed to carry
passenger on non abated value.
Individual/HUF/
Proprietary or
partnership
firm/AOP
Company
under
Companies
Act, 1956
Nil
60
100
40
Supply of Manpower
in respect of services provided or
agreed to be provided by way of
supply of manpower for any
purpose
Individual/HUF/
Proprietary or
partnership
firm/AOP
Company
under
Companies
Act, 1956
25 75
Works Contract Services
in respect of services provided or
agreed to be provided by way of
works contract
Individual/HUF/
Proprietary or
partnership
firm/AOP
Company
under
Companies
Act, 1956
50 50
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
Any person Any person Nil 100
Hope the same will also assist in your professional endeavors.
Dear Professional Colleague,
As the Union Budget has proposed multiple changes in Service Tax in light of Negative List of Services, an important
aspect of burden of tax liability under Reverse Charge concept has also been proposed to be replaced from existing
provisions.
Applicability of New Reverse Charge Mechanism
According to Notification No 15/2012-ST dated 17.03.2012, the proposed Reverse Charge Mechanism will be made
applicable from the date on which Section 66B of the Finance Act, 1994 comes into force. The said Section 66 will come
into force only upon the date when the Finance Bill, 2012 is passed by the Parliament and receives the consent of the
Hon’ble President of India to be called as Act.
Therefore, the new reverse charge mechanism will be applicable from the date when Finance Bill, 2012 is enacted.
Clarification on new reverse charge mechanism in respect of services of Rent –a – cab, Manpower Supply and Works
Contract
Under the new reverse charge mechanism will also be applicable in respect of
a) Rent – a – cab service
b) Manpower power supply service
c) Works Contract service
However, this reverse charge under above mentioned three services will be applicable only if, the service provider
of these 3 services is an Individual or HUF or Proprietary or partnership firm or AOP and the service receiver is a
Company registered under Companies Act, 1956
For details and applicability of new reverse charge mechanism in case of all the services, please refer table below:
Description of a service
Service provider
Service receiver
Percentage of service tax payable by the
person providing service Percentage of service tax payable by the person receiving
the service Insurance Services
in respect of services provided or
agreed to be provided by an
insurance agent to any person
carrying on insurance business
Insurance agent Business man
carrying on insurance business Nil 100
GTA in respect of services provided or
agreed to be provided by a goods
transport agency in respect
of transportation of goods by road
Goods transport agency Consignor or
Consignee is specified person Nil 100
Sponsorship in respect of services provided or agreed to be provided by way of
sponsorship Any person Body corporate or
partnership firm Nil 100
Arbitral Tribunal in respect of services provided or agreed to be provided by an
arbitral tribunal Arbitral tribunal
Business entity Nil 100
Advocate Services in respect of services provided or agreed to be provided by
individual advocate Individual advocate
Business entity Nil 100
Support Service Government Business Nil 100in respect of services provided or
agreed to be provided by way of
support service by Government or local authority entity Rent a Cab Services
(a)in respect of services provided
or agreed to be provided by way
of renting or hiring any motor
vehicle designed to carry
passenger on abated value.
(b)in respect of services provided
or agreed to be provided by way
of renting or hiring any motor
vehicle designed to carry
passenger on non abated value.
Individual/HUF/
Proprietary or
partnership
firm/AOP
Company
under
Companies
Act, 1956
Nil
60
100
40
Supply of Manpower
in respect of services provided or
agreed to be provided by way of
supply of manpower for any
purpose
Individual/HUF/
Proprietary or
partnership
firm/AOP
Company
under
Companies
Act, 1956
25 75
Works Contract Services
in respect of services provided or
agreed to be provided by way of
works contract
Individual/HUF/
Proprietary or
partnership
firm/AOP
Company
under
Companies
Act, 1956
50 50
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
Any person Any person Nil 100
Hope the same will also assist in your professional endeavors.
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