Service tax clarification - reverse chg

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 July 2012 Hi,

I have few question over reverse chargers (notification Per Notification No. 30/2012 and Notification 36/2012)

· Whether we can avail credit for all the reverse charges (even if they don’t have service tax registration no.)

· Whether Service tax will be charged on the balance value after abatement (Notification No. 26/ 2012)

· Whether service tax to be paid on the time of payment to service provider or accounting of expenses

· Whether we need to pay service tax even if the individual or partnership firm not having services more then 10 lacs pa.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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09 July 2012 1. Under reverse charge the service recipient has to register and obtain service tax registration number. The service tax will be paid bu quoting the registration number of the service recipient

Accordingly the service recipient is eligible to claim credit of service tax paid under reverse charge.

2. Service tax will be calculated on the balance after claiming abatement.

3. Yes service tax will be payable even if the turnover of the service provider is less than Rs. 10 lakhs. This is because the exemption available to the service provider is NOT passed on to the service recipient.

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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09 July 2012 The liability of the service provider and service recipient are different and independent of each other. Thus in case the service provider is availing exemption owing to turnover being less than Rs 10 lakhs, he shall not be obliged to pay any tax. However, the service recipient
shall have to pay service tax which he is obliged to pay under the partial reverse charge mechanism.

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CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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09 July 2012 Under Reverse charge, liability to pay service tax arises on the payment to service provider.

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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09 July 2012 As per guidance Note 10.1.4-

Normally, the credit of the entire tax paid on the service received by the service receiver would be available to the service recipient subject to the provisions of the CENVAT Credit Rules 2004. The credit of tax paid by the service provider would be available on the basis of the invoice subject to the conditions specified in the CENVAT Credit Rules 2004. The credit of tax paid by the service recipient under partial reverse charge would be available on the basis on the tax payment challan, again subject to conditions specified in the said Rules.

GAURAV GOPAL BADWE

GAURAV GOPAL BADWE (Expert)
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15 July 2012 THANKS FOR A VERY SIMPLE AND CLEAR EXPLANATION TO THE QURRIES.

REGARDS,

GG BADWE

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Querist : Anonymous

Querist : Anonymous (Querist)

23 July 2012 Hi,

In which account code we need to pay all the revserve chg (ST,Ec &HSC)

Regards

Sathish