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Service tax - reverse charges

Bablu Kumar Jha (Accounts Manager) (266 Points)

12 January 2017

Hi Professionals & Expers,

Please guide me on below topic :-

I have received an Invoice in the month of April 2016 from our legal firm & Road Transporter they have charged only his fee amount and service tax payable by reciever as mentioned his invoice, our business status are Individual and Mfg Unit at Haryana, and i have taken service tax in the month of December 2016.

My Question is :-

Should i pay service tax (Under RCM) on Invoice recvd from Legal Firm &Transporter? While i have registred in service tax in the month of Dec 2016.

Thanks,

With Regards.

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2 Replies

Nagendra Hegde (Chartered Accountant) (1948 Points)
Replied 13 January 2017

Dear Sir,

Since you are a manufacturer you may be having a factory governed by factories Act. In such case as a payer of freight you need to discharge service tax on GTA services received irrespective of when you have obtained service tax registration.

Similarly in case of legal services, the receiver being a business entity liability would arise if your turnover exceeds 10 lakhs in prev. FY.

Since registration is obtained only in Dec, service tax shall be paid now with interest for the delay period as arrears.

Please also note that liability under RCM would arise when you make the payment to the vendors.

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Bablu Kumar Jha (Accounts Manager) (266 Points)
Replied 16 January 2017

Originally posted by : Nagendra Hegde
	Dear Sir, Since you are a manufacturer you may be having a factory governed by factories Act. In such case as a payer of freight you need to discharge service tax on GTA services received irrespective of when you have obtained service tax registration. Similarly in case of legal services, the receiver being a business entity liability would arise if your turnover exceeds 10 lakhs in prev. FY. Since registration is obtained only in Dec, service tax shall be paid now with interest for the delay period as arrears. Please also note that liability under RCM would arise when you make the payment to the vendors.