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Rcm-works contract

14 May 2014

Dear All,

Would you please let me know that, if a company (Manufacutering Concern) receive the services from individual vendor in respect of "Stiching of the uniforms" is cover under the "RCM-WORK CONTRACT", if yes, then can service receiver company is avail the cenvat credit on the S.Tax deposited through "RCM".

Need your valuable feedback on this issue.

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8 Replies

Abdu Rahim.c (Calicut) (44 Points)
Replied 14 May 2014

No.It is not cover under RCM

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VINOD KUMAR RAI (FINANCE) (40 Points)
Replied 14 May 2014

Dear Sir,

If its not covered under the RCM then under which taxable service category its come. Please help me.

Abdu Rahim.c (Calicut) (44 Points)
Replied 14 May 2014

u can claim cenvat as it is a input service indirectly related to the manufacture. as am not a expert, awaiting for mor reply in this regard

Abdu Rahim.c (Calicut) (44 Points)
Replied 14 May 2014

if it is a company there is a option of partial revers charge.

Abdu Rahim.c (Calicut) (44 Points)
Replied 14 May 2014

in partial reverse charge the recipient company liable to pay 50% of the tax on the value of the service portion determined under rule 2A

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Akshay Garg (Indirect tax trainee) (457 Points)
Replied 15 May 2014

Works contract would be charge to partial reverse charge as conditions specified in 30/2012 have been fulfilled by your case. However CENVAT of the same can be availed as per CCR 2004. Please keep in mind the valuation principles as set out in ST valuation rules.

Rajendra Lilhare (jr.Account Officer) (24 Points)
Replied 24 May 2014

Under RCM Service paid by us(BSNL)as receiver as 50% to S/P and 50% deposited to deptt. if Service provider did not his portion to s.T.Deptt. are service provider responsible for his default pl.explain.

VINOD KUMAR RAI (FINANCE) (40 Points)
Replied 26 May 2014

If service provider is having service tax registeration & having turn-over more than 10 lakhs in previous Financial Year .Then service Provider is Liable to pay Service tax on his portion.