Reverse charge mechanism on manpower recruitment

1641 views 5 replies
Gud evening friends, Have a small query relating to applicability of reverse charge mechanism. My client is a sole proprietorship firm engaged in recruitment/supply of man power on permanent basis. Whether the provisions of reverse charge mechanism will be applicable on it and if yes at what rate service tax will have to be paid by thevservice provider?
Replies (5)

Yes. Partial Reverse charge is applicable since your firm is proprietorship. The tax is to be paid at the rate of 12.36% on 25% of invoice value.

Thanks Mr. Sahil for your valuable reply. My client has already paid service tax @ 12.36% for the period July to Sep 2012 and now the parties are claiming refund of amount in excess of 25% so that they can remit it to govt. in their account.

Reverse tax is applicable when service provider is individual/partenrship and service receiver is body corporate. Ratio is 25% : 75 %

Originally posted by : Gourav Choudhary
Thanks Mr. Sahil for your valuable reply. My client has already paid service tax @ 12.36% for the period July to Sep 2012 and now the parties are claiming refund of amount in excess of 25% so that they can remit it to govt. in their account. Wht is the option left with my client in the current scenario?

In This Case, Gaurav, You Can Make Journal Entry, & Can Claim Refund/Adjust Service Tax paid in Excess of 75% from Goverment.

 

 

one of my client is labour contractor (tile contractor). he is provied labour service to a builder. my bill is as belowe

Labour chg. 100000/-

Service Chg. 12360/-

Total value is 112360/- 

the builder pay to us  up to 30/06/2012   Rs. 111360/- and know he pay Rs. 102090/- (less TDS 1000)

 

We want to know what is the right method of aacouning. b'cos my ladger is showing outstanding of rs. 9270/- i.e. 75% of service tax 

 

in this case revrse charge method is applicable of not.


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register