Krishna Srivastava (Professional Practice) (92 Points)
20 September 2013Dear Sir,
We are recipient of services under a works contract. The service provider has no service tax registration and he has also not charged any tax in the bill. What is our liability towards service tax under RCM. whether we are responsible for our share of 50% in this case or for entire amount i.e. @ 12.36%. Please advise.
CA girl
(Article Trainee-CA Final)
(1942 Points)
Replied 20 September 2013
Hello, Even if your service provider has not charged service tax or has not obtained ST registration still you will be liable to pay only your share of service tax to the gov. Further, the rate is not 50% of 12.36%. There are various rates prescribed for different types of works contracts, you should clarify under which category your works contract falls under and decide accordingly.
Normally for the Category Original Works/New Works the rate would be- 4.944%(12.36% * 40%) of which you should pay half,Ie;2.472%.
Arun Kumar Singh
(GST Advocate)
(15220 Points)
Replied 20 September 2013
Provided or agreed to be provided by service portion in execution of works contract by any individual, Hindu Undivided Family or partnership firm, whether registered or not, including association of persons, located in the taxable territory to a business entity registered as body corporate, located in the taxable territory.
Amol Rathi
(STUDENT)
(28 Points)
Replied 20 September 2013
Ganeshbabu K
(Audit and Tax Advisory)
(48564 Points)
Replied 20 September 2013
Vishal
(Student)
(154 Points)
Replied 21 September 2013
You just need to pay your part of service tax.
Ravi Nallipogu
(Student )
(128 Points)
Replied 21 September 2013
MANJEET SINGH
(DY.MANAGER ACCOUNTS)
(26 Points)
Replied 23 September 2013
Dear Sir,
We are receipient of services of Civil Contractor (Prop.)through different works contracts entered into at different dates for repair,renovation and even new construction also which does not include cost of land but only material and cost of labour provided by him but the contractor does not have registered and neither charging any service tax in the bills. In bills he raised on us includes the composite rates of labour which does not specify the cost of materials.
In this case what is our liability in case of reverse charge mechanisim.
Although till date we are depositing the service tax as 50% of total value of bill he raised.
Please clarify.
CA Vivek Goyal
(Practising CA)
(148 Points)
Replied 25 September 2013
Example for your problem.
Total Bill amount- Rs. 100
Abated value of service- Rs.40 ( I have assumed 40% category is applicable in your case)
Service Tax portion payable to service Provider-Rs. 2.472
Service Tax portion payable under RCM -Rs. 2.472 ( This amount you are to paid under RCM)
CA Vivek Goyal
(Practising CA)
(148 Points)
Replied 25 September 2013
Dear Ravi, 40% is also applicable in case of immovable properties.
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