Amit Prakash Singh (Accountant) (295 Points)
14 August 2012Dear All Experts
Please expain what is Reverse Mechanism of Service tax in simple term.Please also explain reverse mechanism in two case below:-
1) My company trnsfer Material to oor branch company in different state by road transport .(We are paying Service tax on behalf of transporter).
2) Hire car and taxi on for going one place to other placewithin delhi.
Thanks and Regards,
Amit Singh
Prasad
(Sr. Manager)
(617 Points)
Replied 14 August 2012
In very simple terms; Reverse Charge is where the service receiver pays service tax, instead of service provider collecting and paying it to the treasuery.
Car hire you have two options
1. the vendor bills you with 60% service tax and you pay the balance 40%
2. vendor claims abatment and does not charge you ST you pay 60%.
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