In case of partial reverse charge mechanism the SSI exemption to provider will be available or not ?
SHIVANI MAHESHWARI (CA) (548 Points)
19 October 2012In case of partial reverse charge mechanism the SSI exemption to provider will be available or not ?
CA AYUSH AGRAWAL
(Kolkata-Pune-Mumbai)
(26986 Points)
Replied 19 October 2012
Yes, Definately Its Available.
CA Pooja Agarwal
(Chartered Accountant)
(3228 Points)
Replied 19 October 2012
it is available to the provider but no such exemtion is avialble to the recepient
RAJU
(LEARNER)
(1089 Points)
Replied 20 October 2012
The Notification which provides for exemption upto 10 lacs states that the benefit would be available to Service Provider. In view of this, the benefit would be available only to Service Providers.
CA AYUSH AGRAWAL
(Kolkata-Pune-Mumbai)
(26986 Points)
Replied 20 October 2012
Under Partial Reverse Charge, For Eg;
Service provider :- Individual
Service receiver: Corporate But Turnover Doesnt Exceed 10 Lacs, Then Not Liable to Service Tax.
so in This Case, Service receiver Enjoy Benefit of SSI.
CA Manish
(Job)
(5264 Points)
Replied 20 October 2012
| Originally posted by : CA AYUSH AGRAWAL | ||
 |
Under Partial Reverse Charge, For Eg; Service provider :- Individual Service receiver: Corporate But Turnover Doesnt Exceed 10 Lacs, Then Not Liable to Service Tax. so in This Case, Service receiver Enjoy Benefit of SSI. |
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Proviso to the First para of Notification No. 33 relating to basic exemption limit of Rs. 10 lacs for SSP issued provides as follow:
“Provided nothing contained in this notification shall apply to
a. Such value of taxable services in respect of which service tax shall be paid by such person and in such manner as specified under sub-section (2) of section 68 of the said Finance Act read with Service Tax Rules, 1994”
As can be seen, the SR is not permitted to avail basic exemption limit of Rs. 10 lacs.
CA Manish
(Job)
(5264 Points)
Replied 20 October 2012
Explanation by CBEC.
“The liability of the service provider and service recipient are different and independent of each other. Thus, in case the service provider is availing exemption owing to turnover being less than Rs 10 lakhs, he shall not be obliged to pay any tax. However, the service recipient shall have to pay service tax which he is required to pay under the partial reverse charge mechanism.”
RAJU
(LEARNER)
(1089 Points)
Replied 20 October 2012
Hi Ayush..
The exemption provided in notification no.33/2012-ST dated 20-6-2012 is for the Service Provider. Can you please explain with reference to the provision/notification?
In case of legal services, liability would arise on the recipient only if is a business entity having turnover below 10 lacs in the preceding year (Entry No.6 of Notification No.25/2012 dated 20-6-2012). So in case of other services, the recipient would be liable irrespective of his turnover.
CA AYUSH AGRAWAL
(Kolkata-Pune-Mumbai)
(26986 Points)
Replied 20 October 2012
| Originally posted by : CA Manish Malu | ||
|
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Explanation by CBEC. “The liability of the service provider and service recipient are different and independent of each other. Thus, in case the service provider is availing exemption owing to turnover being less than Rs 10 lakhs, he shall not be obliged to pay any tax. However, the service recipient shall have to pay service tax which he is required to pay under the partial reverse charge mechanism.” |
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Yes, Its True That No Exemption to Service Receiver, of SSP.
But in Case of SSI,
Sunil Kumar G
(AGM Taxation)
(373 Points)
Replied 20 October 2012
SSI Provision dealt under Central Excise, but under Service Tax, it is Small Service Provider.
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