Reverse charge mechanism in security services

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 October 2012 If the service provider is a prop firm already charging full service tax in bill and the service receiv is a body corporate ,then is the body corporate liable to charge 75% over and above and deposit.

Moreover can we take input credit for the service tax charged by the agency....

Vishakha Kejriwal.

Vishakha Kejriwal. (Expert)
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10 October 2012 If the value of service charges is say, Rs. 100/- out of Rs. 12.36 of service tax 75% is payable by the body corporate and 25% by the proprietorship firm to the Government.
The proprietor is entitled to recover only 25% of the service tax from you.

Moreover, the service tax charged by the agency could be availed as Cenvat credit if it qualifies as input service as per the Cenvat Credit Rules 2004.