We are register manufacturing in Excise and Service tax law we are paying GTA and Reverse machanism (Man pawar Services received from Traders) we are Pvt Ltd staus . My Question is in which category Reserse machanism service we have to take. & in return how it's exemtion we have to show.
18 October 2013
As a registered private company you are covered by notification no 30/2012 regarding reverse charge liability. By and large the following services are covered under Reverse Charge Mechanism: GTA, Manpower Service, Legal Services, Rent-a-cab, secrity services and Services received from Directors.
The service recipient has to register himself under each of these categories and pay the service tax under relevant head. No rebate shall be available to the service recipient as a small tax payer i,e he cannot claim exemption of the threshhold limit of Rs.10 lacs. The liability to pay service tax arises from the first rupee paid to the service provider.
The service recipient can claim abatement of 75% of the bill amount as service recipient of GTA and 60% as service recipient of Rent- a - cab service. Security Services will be covered under partial reverse charge mechanism with the service provider paying 25% of the tax liability.
Reverse Charge payments have to be made in cash only for GTA and Rent - a - Cab on which CENVAT Input Credit is available. All other services covered under reverse charge mechanism are eligible as Input Service and CENVAT Credit can be claimed.
19 October 2013
Finance Act 2012 introduced the concept of Negative List of Services in the Finance Act 1994. Earlier under section 65 of Finance Act 1994, 117 services had been notified from time to time. Section 66 C, D & E pertaining to list of services, specified services and negative list of services came into effect on 1st July 2012. The online application for registration of Service Providers / Recipients now offered only one service category "Services Other than Negative List". Existing assessees who started new taxable services, while amending their ST-2 also were allotted the same category.
Sometimes in the last week of November 2012, the Department Notified that the registrations under the category "Services Other than Negative List" would not be valid. People who had registered under this category would have to re-register themselves under the 117 old categories - otherwise the ST-3 Return for the period April-June 2012 could not be filed as the same would not be accepted by ACES. Hence the status quo under Section 65 was restored. This resulted in unneccessary hassles for a large number of assessees who were not updated and not big enough to afford consultants to advise them.
To cut the long story short, in your case, you already are liable under GTA and Manpower Supply Services. You have to amend your ST-2 to include these services. Please also consider whether you are liable under reverse charge mechanism for Rent-a-Cab Service, Security Service and Legal Consultancy Service. If you are likely to be covered take these registrations also. If you are a service provider, let me know the services so that i can suggest the categories for registration.
You have to definitely take registration as a service recipient under Manpower Supply Service.
Please check up on the organization providing security personnel for your factory. If the service provider is not a body corporate, then you should take registration under this category too and pay the necessary service tax under Reverse Charge Mechanism.
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