Reverse charge mechanism

Page no : 2

RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 17 July 2012

The name of the Return will be named as EST return and will be submitted for both excise and service tax.

There is a column no.5, which says about computation of CENVAT/SERVICE TAX payable.

5	Computation of CENVAT/Service Tax payable
	Descripttion of Goods/ Service Tax (a)	CETSH (b)	Exemption Claimed (c)	Effective Rate of duty/Service Tax (d)	Quantity cleared (e)	Total Taxable/ Dutiable Value (f)	CENVAT/ Service tax payable (g)	Re marks (h)

6	Details of CENVAT Credit taken and utilized

For e.g you are paying service tax for advocate fee under reverse charge. First you fill your own out put services in sl no.1,2 and for reverse charge you use next sl. no. value and in column g fill the value of taxable turnover and in column h you write (advocate fee under reverse charge) and next sl. no. .....for GTA with abatement etc.,.......

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Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 17 July 2012

Originally posted by : rish*ta
	I have one more query related to manpower service. Like for an example if vendor provides well trained manpower to handle dogs for security in some organisation, then will this vendor fall under manpower service or the service from said vendor will be treated as proffesional service? Since the vendor is providing well trained manpower who are proffessionally well trained to handle dogs, can this service be treated as proffessional service?

If the control on the manpower is yours then it is to be considered as supply of manpower only. Incase you enter into a contract for fulfillment of a specific job where the control on the job is of the service provider only then it is not to be considered as manpower supply.

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 17 July 2012

Originally posted by : rish*ta
	I have one more query related to manpower service. Like for an example if vendor provides well trained manpower to handle dogs for security in some organisation, then will this vendor fall under manpower service or the service from said vendor will be treated as proffesional service? Since the vendor is providing well trained manpower who are proffessionally well trained to handle dogs, can this service be treated as proffessional service?

Renjith.R.s. (Manager-Accounts) (641 Points)
Replied 17 July 2012

So as per reverse charge method any payment made to SP who regd. under

1.WCT- other than Company

2.Supply of man power- Other than company

3.Hiring Bill- Other than company

Reverse charge is applicable, For payments to companies who regd. under above will not attract reverse charge method, same as per earlier.

Apart from the above all payment made to SP, old system will follow

is it correct

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 17 July 2012

Wef 01-07-2012 there is only one category of service i.e "other than negative list". Hence, it is not mandatory to verify the service under which the service provider has got registered. The principle of the transaction will prevail. Except this other facts as mentioned by you above are correct.

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Renjith.R.s. (Manager-Accounts) (641 Points)
Replied 17 July 2012

Sir,

My doubt is we are regd. under WCT, suppose if we make any payment to SP-Other than company- comes under WCT,manpower supply, Hiring bill then only Revesre charge is applicable.

if you are making any payment to companies comes under above category and other services which not comes under negative list is Reverse tax mechanism is not applicable

Please clarify.

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 17 July 2012

First option as mentioned by you above is correct.

Renjith.R.s. (Manager-Accounts) (641 Points)
Replied 17 July 2012

Second option is just opposite first only ie payment to companies regd under WCT,manpower, hiring and other services not in negative list Reverse tax mechanism not applicable

Renjith.R.s. (Manager-Accounts) (641 Points)
Replied 18 July 2012

Sir,

Please confirm above statement is correct

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 18 July 2012

Under reverse charge service receiver is liable to pay service tax on the specified services i.e rent-a cab, Supply of Manpower, Works Contract, Support Service received by the Govt Authority other than the those mentioned in the negative list. Also wef 01-07-2012 section 65 of the Finance Act has been rescinded which implies that there is no separate classification of service except those as mentioned in notification no 24, 25,26,30/2012- S.T dated 20-06-2012. So it can also be said that there is no requirement to cross check the Reg Cert. of the service provider before entrusting him a specific job as now there is no existence of any classification of service. Hope you are clear now.

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abhinav gupta (article) (24 Points)
Replied 18 July 2012

I have a query that 1 of my client is provide the cab rental service and rate of service tax is 4.94% ( 40% of 12.36 % ).
This client is a prop. .. As per new amendment they are not liable to pay service tax if they provide service to a co. covered in companies act. But service reciepent have to pay the service tax at 100% value. In that case 100% is 4.94 % or 12.36 %

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 18 July 2012

its 4.94% only for the service receiver

abhinav gupta (article) (24 Points)
Replied 18 July 2012

Thank you ajit sir..
I was also think that it is 4.94 % but have doubt.
Is it applicable from 1st july ??

abhinav gupta (article) (24 Points)
Replied 18 July 2012

How can we adjust the amount of service tax already paid ??

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abhinav gupta (article) (24 Points)
Replied 18 July 2012

I am asking this qustion because we are no longer liable to pay the service tax then in that case how can we adjust the service tax amount.
plz rpy asap