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Late registration of service tax in reverse charge mechanism

Ankit Agarwal (Chartered Accountant) (35 Points)

28 June 2013

A private limited Co. is paying freight charges and thus is Liable to take registration under reverse charge mechanism under GTA. But till now transporters were paying the service tax and were adding the same in the invoices issued by them. Thus I have not taken the service tax registration till date. Now will the Co. be liable to repay the service Tax from 1-07-2012 till 30-06-2013 on the invoices on which transporter has already paid the Service Tax. Is any way out?

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5 Replies

sanjay singhal (CA) (987 Points)
Replied 29 June 2013

Yes service receipent is liable to pay service tax under reverse charge m.

1 Like

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Ankit Agarwal (Chartered Accountant) (35 Points)
Replied 29 June 2013

Is there any way out to avoid double payment of Service Tax? As if I pay ST now than i will have to pay interest and penalty for late registration?

Prabhat Kumar (Advocate & Consultant) (1912 Points)
Replied 02 July 2013

The Notification No 30/2012 dated 20.6.2012 Ex.I clearly says the person who pays OR liable to pay freight for the transportation be treated as the person as recipient of service.So, you are not liable to pay service even under reverse charge method again as it will amount to double taxation on the same activity.So,now onward you rectify your procedure.

1 Like

CA Harshal Pahade (Professional) (79 Points)
Replied 06 July 2013

Dear Ankit,

There is no need to pay service tax under revarse charge mechanism for transport service if Goos Transprt Agancy (GTA) has paid the service tax on it.. So don't worry... You will not be liable for any interest or penalty.

You have to pay service tax under reverse charge mechanism only when GTA does not leavy service tax on his bills. But if GTA has paid service tax then you are not liable to pay tax.

Sagar Jagtap (Accountant) (224 Points)
Replied 04 March 2014

we receiving the manpower services and we also registered under reverse charge of machanism but the service provider gives us bill with full amount of service tax i.e.12.36% . We taking all cenvat in the same month. Please suggest me is this right?