Become Govt. Certified GST Practitioner in just 58 hrs. Register Now!

Reverse charge mashanism

Yashwant Patel (Working with CA firm) (117 Points)

05 February 2013

i am a body corporate receiving supply of man power service from an individual,

Case 1: his gross receipt is below 10 lakh and not registered

Case 2: his gross receipt is exceeds 10 lakh but not regostered

Case 3: his gross receipt is exceeds 10 lakh and registered (No service tax charged in bill)

in this case i am covered under reverse charge machanism (100) so whether i am responsible for paying service tax in above mentioned case.

please keep in mind that 10 lakh threshold limit not applicable in case of reverse charge machanism.

Reply
Follow
Share

5 Replies

V.Rajalakshmi (proprietrix) (65 Points)
Replied 05 February 2013

Dear Yashwant Patel

Service receiver is liable to pay service tax under two situation. one under reverse charge and under joint charge. Your case fit under joint charge mechanism and in my opinion you may have pay service tax of your portion ie 75 % in all the three situations.

1 Like

Upgrade to CAclubindia Pro. Subscribe Now!

Sravan Reddy N (CA FINAL,CMA FINAL) (49 Points)
Replied 05 February 2013

In the above cases u have to pay 75% to govt & 25% to vendor.

V.Rajalakshmi (proprietrix) (65 Points)
Replied 05 February 2013

Dear All

IF the vendor is not registered service provider then 25% of st need not be paid to the vendor and 75 % alone needs to be paid to the Govt

Manoj Agarwal (Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com) (3456 Points)
Replied 05 February 2013

Dear Mr. Patel,

Under Reverse Charge Mechanism (Notification No. 30/2012), the liability of the service receiver to pay service tax is independent of the liability of the service provider. In your case, since you are a body corporate and the service provider of manpower supply is an individual, you are liable to pay tax directly to the exchequer, tax on 75% value of the taxable service. As per Rule 7 of POT Rules, 2011 the point of taxation is the date of payment to the service provider.

So, please don't be bothered about the taxability of service provider. However, he can charge tax on only 25% value of manpower supply service, only if he is a registered service provider.

Regards,

tax2001-it @ yahoo.com

1 Like