Reverse charge-urgent
This query is : Resolved
27 January 2014
We are Pvt Ltd company take rent a cab for official tour, now my query is:
take a example of two bill
Bill issued by service provider to us
case 1 Rent a cab service 1000.00
ST@4.94% 49.40
Total 1049.40
As per notification number 30/2012 how much amt we(company) have to pay to service tax deptt.?
take a example of two bill
Bill issued by service provider to us
case 1 Rent a cab service 1000.00
ST@4.94% 49.40
Total 1049.40
As per notification number 30/2012 how much amt we(company) have to pay to service tax deptt.?
27 January 2014
Hi
40% by Service receiver & balance / nil by SP.
Thanks
40% by Service receiver & balance / nil by SP.
Thanks
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27 January 2014
You will have to pay 100% of Rs.49.40 to the service tax deptt under reverse charge. as the intention of the Service Provider is not to avail cenvat credit.
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27 January 2014
sir thanks for ur prompt response
but i wants to know that 40% directly payable to service provider or govt?
if to directly to govt then shall we deduct from service provider bill?
but i wants to know that 40% directly payable to service provider or govt?
if to directly to govt then shall we deduct from service provider bill?
27 January 2014
Yes. You are not supposed to make this payment to Service Provider. Deposit Service Tax amount directly with the Service Tax Department.
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27 January 2014
thanks Avtar ji but by deducting from service provider bill ? or we give to service provider whole rs 1049.4(ignore TDS) and another Rs.49.4 to ST deptt.?
27 January 2014
Hi
Pl note you will have to pay ST mentioned on bill (to Service Provider i.e. 60%) + 40% of ST from your packet to service tax dept. directly.
You need not required to TDS on ST charged by SP.
Thx
Pl note you will have to pay ST mentioned on bill (to Service Provider i.e. 60%) + 40% of ST from your packet to service tax dept. directly.
You need not required to TDS on ST charged by SP.
Thx
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27 January 2014
Thanks Vaibhav ji and avtar ji
Following is the status of bill:-
Gross amount 1000.00
ST@4.940% 49.40
Total 1049.40
Now as per @Vaibhav ji ans we pay service provider Rs.1049.40(Pls Ignore TDS) and 49.40 to ST Deptt.(from company pocket)
but as per Avtarji ans
we should pay Rs.1000 to service provider and 49.40 to ST Deptt.
what is the right solution?
Following is the status of bill:-
Gross amount 1000.00
ST@4.940% 49.40
Total 1049.40
Now as per @Vaibhav ji ans we pay service provider Rs.1049.40(Pls Ignore TDS) and 49.40 to ST Deptt.(from company pocket)
but as per Avtarji ans
we should pay Rs.1000 to service provider and 49.40 to ST Deptt.
what is the right solution?
27 January 2014
Thanks Vaibhav ji and avtar ji
Following is the status of bill:-
Gross amount 1000.00
ST@4.940% 49.40
Total 1049.40
Now as per @Vaibhav ji ans we pay service provider Rs.1049.40(Pls Ignore TDS) and 49.40 to ST Deptt.(from company pocket)
but as per Avtarji ans
we should pay Rs.1000 to service provider and 49.40 to ST Deptt.
what is the right solution?
Following is the status of bill:-
Gross amount 1000.00
ST@4.940% 49.40
Total 1049.40
Now as per @Vaibhav ji ans we pay service provider Rs.1049.40(Pls Ignore TDS) and 49.40 to ST Deptt.(from company pocket)
but as per Avtarji ans
we should pay Rs.1000 to service provider and 49.40 to ST Deptt.
what is the right solution?
27 January 2014
On the basis of the figures of the bill provided by you, pay Rs.49.40 to the Service tax department. Pay Rs.1000-10=990(after deducting TDS) to the service provider. Deposit TDS Rs.10 with TDS department. The service provider is claiming abatement of 60% and not claiming Cenvat that's why he has charged 40% of service tax.
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27 January 2014
Hi Vaibhav can you please clear your point because what you are saying and what avtar is saying is totally different.
27 January 2014
Hi
Pl note in your example service provider should have charged as follow:
1000 + 74.16 i.e.ST @ 60% of of 12.36% of ST liability.
Since in your case its is charged @ 40% which is wrong.
When you receive invoice from SP you need to check whether RCM is applicable or not, if yes then check that only ST is charged by SP for his own liability i.e. 60% of 12.36%.
Now while making payment to service provider you have to make him full payment of ST & deduct TDS on Basic Invoice Value.
Over & above this you will be required to make payment @ 40% of 12.36% of your ST liability on Basic value directly to govt under RCM.
Thx
Pl note in your example service provider should have charged as follow:
1000 + 74.16 i.e.ST @ 60% of of 12.36% of ST liability.
Since in your case its is charged @ 40% which is wrong.
When you receive invoice from SP you need to check whether RCM is applicable or not, if yes then check that only ST is charged by SP for his own liability i.e. 60% of 12.36%.
Now while making payment to service provider you have to make him full payment of ST & deduct TDS on Basic Invoice Value.
Over & above this you will be required to make payment @ 40% of 12.36% of your ST liability on Basic value directly to govt under RCM.
Thx
27 January 2014
As per Notification 26/2012 regarding abatement, the service tax @40% is to be charged in case of Renting of any motor vehicle designed to carry passengers if the CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004 by the service provider. In my opinion, the service tax @40% has been rightly charged and the same is to be deposited with the service tax department by the service receiver. The net payment after deduction of service tax and TDS is to be made to service provider.
27 January 2014
Dear Avtar Ji
Answer given by me is keeping RCM under focus as questioned by Author.
I do agree with ans given by you in light of abatement.
Thx
Answer given by me is keeping RCM under focus as questioned by Author.
I do agree with ans given by you in light of abatement.
Thx
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