Rcm-manpower

Queries 526 views 2 replies

Rakesh hegde

Audit Consultant

81 Points Joined May 2012

Dear Friends,

Fact of the case:- for the month October, We have received a service of labour supply (Manpower for interior work). They have worked in our customer place as per our requirement & Creditor charged 12.36% of Service Tax on the invoice.

Issue:- As per RCM rules , our liability is 75% ST. But the service provider has charged 100% service tax that is he has followed the old scheme. Now the question is since we have already paid 100% of the amount with 12.36% ST, Will our liability still subsists over Service tax to be paid under RCM as already service provider has collected 12.36%. If yes will it not be double revenue to Government. If no then should we obtain any letter from service recipient as to he has discharged the liability hence no amount is due towards ST.

Thank you

Replies (2)

DIBYENDU

SERVICE

266 Points Joined August 2008

There is no declaration process announced by CEBC to discharge/reld ase Service provider or receiver liability under RCM. You must deposit 75% of 12.36% S.T. amount on gross bill value charged by the service provider on his bill within the 7th of the following month on which you pay billed amount to the service provider.If u fail to deposit the same you may deposit it on any other date with appropriate rate of interest. But it is not a double tax to the government.Your service provider show 25% of 12.36% as his liability in the ST-3 submitted for OCT12 to MAR 13 return, and .adjust his excess tax paid to the Govt. in any of the following month/quarter at the time of deposit his future S.T. Liability to the Govt. The amount you excess paid to the service provider may adjust at the time of future time payment or call him to refund.