Service tax reverse charge mechanism

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aakashgilda (Querist)
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29 April 2014 In case we get the invoice of purely labour charges from a subcontractor as subcontracting charges,i.e a material sent for some processing.

The party providing the service do not charge any service tax on it.and annual turnover with that party is around Rs.25,00,000.

In the above case Service tax reverse charge is applicable?

Vidya Jain

Vidya Jain (Expert)
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29 April 2014 Aakashji,

You are liable to service tax under reverse charge mechanism. It is independent whether they charge service tax or not.

In case you require further clarifications, feel free to get in touch

CA Vidya Jain
+919836144143

aakashgilda

aakashgilda (Querist)
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29 April 2014 As the invoice received by my client,invoice contains the words that " Serice Tax is not applicable ".

And is there any Threshhold limit for applicability of Reverse Charge?

What to do in such case ?

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KUMAR trp707@gmail.com

KUMAR trp707@gmail.com (Expert)
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29 April 2014 threshold limit avail only service provider.
up to limit is rs 10 00 000/-. not liability of stax.

first u collect s tax from ur main contractor and he will take cenvat credit and u pay

Gopalkrishna Hegde ,CA,DISA

Gopalkrishna Hegde ,CA,DISA (Expert)
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30 April 2014 Hi

Please clarify whether the invoice raised by subcontractor is towards supply of manpower or is it towards jobwork charges for material sent?

KUMAR trp707@gmail.com

KUMAR trp707@gmail.com (Expert)
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30 April 2014 invoice rise on manpower supply can pay tax 3.09%

in case of used material and labour = transfer of property right can rise invoice as a works contractors.

aakashgilda

aakashgilda (Querist)
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30 April 2014 Labour charges are for jobwork charges for the material sent.

aakashgilda

aakashgilda (Querist)
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30 April 2014 @ Kumar Sir,

Please can you elaborate for the 1st reply u gave ?

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