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Service tax on reverse charge

riddhi (student) (746 Points)

02 February 2017

If we make a separate bill for interior design i.e. mat + service then on mat on how much vat will be charged + do we have to pay service tax at the rate of 15% on the entire service amount. Also if they give a combined bill then on the entire amount do we need to pay service tax @ 15% works contract?

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3 Replies

Nikhil Sharma (Government Service) (539 Points)
Replied 02 February 2017

In case of separate bill, vat as applicable will be charged on material and service tax @ 15% will be charged on service portion.

In case of combined bill, service tax @ 15% will be charged on 70% of the total amount.

And if these services are provided to organised sector( firm, company etc) then reverse charge will become applicable. Then 50% of total service tax liability will be paid to government by service provider and 50% by service receiver.

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riddhi (student) (746 Points)
Replied 02 February 2017

The service receiver is a company. So abatement will be 30% only if they give a combined bill. I think service provider is an individual. Thanks a lot