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Service tax liability under reverse charge mechanism

adya shakti (article) (67 Points)

16 July 2014

Dear Experts,

If a person is covered under reverse charge mechanism but he is not registered under service tax, so to make payment of his service tax liability is he required to register under service tax or there is any other procedure for that??

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9 Replies

Harendra Kumar (Tax Advisor ) (1326 Points)
Replied 16 July 2014

Sir,

There is no other way, So that you have to registered under Service Tax Dept.

Thankig you,

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CA Piyush Jhawar (Chartered Accountant) (545 Points)
Replied 16 July 2014

@ adya shakti

Yes you have to get yourself registered under reverse charge mechanism.Moreover Adya, once you register yourself, you will be able to get credit of service tax paid under reverse charge mechanism too (But mind you you will not be able to get credit for such tax paid which is covered under 100 % reverse charge mechanism as it is not considered an output service as per CCR 2004).

You have to apply for form ST-1 through the dedicated portal https://www.aces.gov.in/.

Thanks, I hope this helps!!!!!

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Harendra Kumar (Tax Advisor ) (1326 Points)
Replied 16 July 2014

Sir,

Realy sir, we could not get the benefit of RCM under CCR, 2004, plz provide the clearification.

In this reagad your earlier action would be highly appreciated.

Thanking you,

CA Piyush Jhawar (Chartered Accountant) (545 Points)
Replied 16 July 2014

@ Harendra

You will not be allowed credit under RCM if it is being covered under 100% RC by the Recipient of Service.So do check that aspect.

Harendra Kumar (Tax Advisor ) (1326 Points)
Replied 16 July 2014

Sir,

Again requested to you plz forward the link or case law in this regard.

Thanking you,

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CA Piyush Jhawar (Chartered Accountant) (545 Points)
Replied 17 July 2014

@ harendra Look up rule 2p of CCR 2004

Ajay Kumar Thakur (Accounts Manager) (33 Points)
Replied 17 July 2014

Dear Sir,

As far As Cenvat is concerned under reverse charge mechenism, As per my understanding credit of Rent a Cab can't be claim, otherwise all the other service tax paid under reverse charge can be availed under cenvat provision.

Please correct if i am wrong, with suitable guidelines.

Harendra Kumar (Tax Advisor ) (1326 Points)
Replied 17 July 2014

Sir,

Mr. Ajay, it is ok and various RCM are admissable for CENVAT purpose and about Rent-A-Cab also will be admissable but some circumstance have to fillfull otherwise not allowed.

e.g.

If a manufacturer or service provider recd. rent-a-cab services and it is related to operate business as Input and liability of duty have to pay whole or partial ratio which are terms & condition are applicable. So that duty paid by receiver in relation of business then CENVAT credit admissible.

Other GTA is applicable 100% of receiver liability and receiver paid such duty and take the CENVAT credit.

As a Business Support same condition.

Thanking you,