kartika sahoo (paid up staff) (27 Points)
07 September 2015Dear sirs,
pls understand d situation and advise me.
A company is availing service of renting of motor vehicles from unregistered service provider.
For Taxability of this service we have to consider (i)abatement (ii)Reverse charge mechanism (iii) partial reverse charge mechanism rules.
what will be the tax liability of service receiver i.e. comapny?
Regards
kartik
Piyush Tanwar
(Assistant Manager - Accounts)
(1432 Points)
Replied 07 September 2015
(iii) Partial Reverse Charge Mechanism.
services provided or agreed to be provided by way of renting or hiring Service Provider - NIL
any motor vehicle designed to carry passenger (With abatement) Service Receiver - 100%
in respect of services provided or agreed to be provided by way of renting or hiring Service Provider - 50%
any motor vehicle designed to carry passenger on non abated value. (Without Abatement) Service Receiver - 50%
Regards
Piyush Tanwar
Mobile - 9717468521
Email - capiyushtanwar91 @ gmail.com
kartika sahoo
(paid up staff)
(27 Points)
Replied 07 September 2015
Thanks piyush.
but here the company is taking this service from unregistered service provider. so my quary is:
should the company pay tax on 40% of total amount of sevice under full RCM,availing abatement
or
only 50% of tax amount to govt. and another 50% will not be paid to the vendor as it is unregistered.
pls.
Piyush Tanwar
(Assistant Manager - Accounts)
(1432 Points)
Replied 07 September 2015
If company availing abatement benefit then company must have to pay tax on 40% of the total amount under RCM.
Company only pays tax on 40% of the total amount to the govt as it is unregistered vendor.
kartika sahoo
(paid up staff)
(27 Points)
Replied 07 September 2015
thank u.
my question is Can company avail this abatement and pay only 40% instead of 50%?
Piyush Tanwar
(Assistant Manager - Accounts)
(1432 Points)
Replied 07 September 2015
yes company can avail this abatement
CAclubindia
