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St reverse charge

venkateswarlu. (CA Final ) (118 Points)

29 August 2012

Whether Reverse Charge is applicable, Hired Vehicle carrying passengers & Hired Equipment ?.

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4 Replies

DAYANANDA K N (ACCOUNTS EXCECUTIVE) (575 Points)
Replied 29 August 2012

Applicable on hired vechile carrying passengers. Refer service tax Notification No.36/2012 for full details.

Regards

Dayananda

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(Guest)

"Reverse Charge" is a part of the VAT law in a growing number of European countries.

It states that the VAT (Value Added Tax) for Goods and Services delivered inside the country by a foreign company is owed by the recipient of the goods and not by the foreign service provider/supplier.

VAT must not be charged on invoices to the recipient. By law, a clear statement must appear on each of these invoices indicating that the liability for the payment of VAT is reversed to the recipient.

The recipient has to calculate, report and pay the VAT (it may be recoverable if the recipient is VAT registered).

The foreign service provider/supplier may be entitled to a VAT refund claim for all VAT charges by local suppliers.

Mallikharjun (Deputy Manager) (304 Points)
Replied 31 August 2012

RCM is applicable only for renting of vehicles meant for "passengers" only. If it hires equipment, RCM is not applicable.

CA Saiyum khan (Practicing CA) (690 Points)
Replied 31 August 2012

The relevnat poriton of notificaiton has been posted below. It does not include hiring of equipments.

(v) provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers to any person who is not in the similar line of business or supply of manpower for any purpose or service portion in execution of works contract by any individual, Hindu Undivided Family or partnership firm, whether registered or not, including association of persons, located in the taxable territory to a business entity registered as body corporate, located in the taxable territory;