vinoth (B.Com) (52 Points)
23 May 2013Dear sir
An agency is providing us the Maintainance work for our apartments which includes Manpower on House keeping. There are not charging service tax. Are we required to deduct Service tax under "Reverse charge" and pay to government. Please guide us.
With regards
S.Vinoth
Vinoth
(Assistant Manager Finance)
(166 Points)
Replied 23 May 2013
CA girl
(Article Trainee-CA Final)
(1942 Points)
Replied 23 May 2013
If the agency is not a company then you are required to pay to the government 75%(ie;Service value*12.36%*75%) of the service tax on the service value irresepective of whether the service provider is registered or not or whether he gives tax invoice or does'nt give. Under reverse charge the liability of service provider and the service receiver are independent and hence you have to pay service tax to the government.
CA Vikash Burnwal
(CA,CS,CWA)
(45 Points)
Replied 23 May 2013
The question of applicability of service tax under RCM depends upon the nature of service provided and legal status of entity. As per Item No. 8 of the Notification No. 30/2012 dated 20.06.2012, the service tax in respect of manpower supply (temporarily or otherwise to another person to work under his superintendence or control) provided by individual, HUF, proprietary firm or partnership firm including AOP provided to a business entity registered as a body corporate is partially payable by service provider and partially payable by service receiver. However, if service is provided by body corporate then only service provider is liable to pay service tax.
Assumption ; Since from query, the nature of service provider and service recepient is not clear, it is assumed that agency is not a body corporate and service recepient is a registered as a company.
Conclusion: If the Agency's responsibility is supply labour/man power and the execution of work is the responsibility of Agency, then it does not come under Reverse Charge Mechanism. If the contractor responsibility is supply labour/man power and the execution of work is the responsibility of your company, then it is manpower contract. and accordingly, the service tax to the extent of 75% is payable by recipient of service and balance by service provider.
Note: If the contract is for doing/execution of works under the supervision of contractor and penalty is levied for delay etc then it is not covered under Manpower contract. Contract agreements need to be studied accordingly.
Thanks.
vinoth
(B.Com)
(52 Points)
Replied 23 May 2013
if service receiver is the firm and registered under Service tax, Conclusion is same or not?
CA Vikash Burnwal
(CA,CS,CWA)
(45 Points)
Replied 23 May 2013
chandan pandey
(ACCOUNTANT)
(38 Points)
Replied 24 May 2013
Dear Sir,
Reverse charge main yadi provider ka registration nahi hai jo ki 25% of 12.36 ka tax provider kaise or kis a/c main submit karega, kya pahele use registration karwana hoga or phir submit karna hoga.
please clear my question.
thanks
Regards
chandan pandey
CA Vikash Burnwal
(CA,CS,CWA)
(45 Points)
Replied 25 May 2013
Chandan,
I am not able to understand your question clearly. But is established that Service receiver is liable for only his part and not entire amount, even if service provider does not charge his portion of service tax. Service receiver is not liable for servie provider's service tax liablity under RCM.
CHANDRA KANTH
(ARTICLE TRAINEE)
(55 Points)
Replied 29 May 2013
Reverse Charge Mechanism on Supply of Manpower for any purpose is applicable for below criteria:
1.Service Provider - Individual, HUF, proprietary or partnership firm, AOP
2.Service Recepient - Business entity registered as body corporate
As you have mentioned Maintenance work for apartments assuming you are not a body corporate RCM is not applicable
NAIMUL HASSAN
(ACCOUNTS EXECUTIVE)
(24 Points)
Replied 22 July 2013
ramesh chandra pandey
(Manager -F & A)
(21 Points)
Replied 18 October 2013
Dear Sir,
We Received MANPOWER supply Service bill from non-company , they charged services tax @ 3.09% on their bill, can we are liable to pay balance services tax @ 9.27% to the department .
as we are registered under company act this year & we have not services tax registration due to we are registered under Haryana VAT as a trader .
kindly advise our liability for services tax ? if yes what is the process ...
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