Reverse charges mechanism

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Saptarshi Haldar (Querist)
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26 February 2014 our company giving a work order for Boring and Sinking of deep tube well to a individual contractor for our project. whether reverse service charge will be applicable against this work order? if service provider does not charged service tax in bill, than what will be rate of reverse service tax from the side of service receiver?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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04 March 2014 1. The work comes within the definition of works contract. Accordingly reverse charge is applicable since the service provider is an individual.

2. The company is liable for 50% of the service tax irrespective of the amount charged as service tax by the service provider.

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