Works contract- partial reverse charge

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CA girl

Article Trainee-CA Final

1942 Points Joined May 2011

1.How to identify whether a particular works contract would qualify for Partial Reverse charge of Service Tax?

2. Will the service provider charge any service tax on the invoice for partial reverse charge(for works contracts)?

3. Composition scheme is basically adopted by a service provider who provides a taxable service as well as supplies materials (on which he charges VAT) through the same works contract? Am I right?

Replies (3)

Rishabh Mishra

Student CA Final

44 Points Joined October 2012

1. https://www.indiantaxupdates.com/2013/01/25/service-tax-reverse-charge-mechanism-accounting-treatment/

Rishabh Mishra

Student CA Final

44 Points Joined October 2012

Partial Reverse Charge Mechanism is not applicable for all cases. For Partial Reverse Charge Mechanism to apply, it needs to fulfil 2 conditions:

The Service Provider is a non corporate entity (See Separate FAQ on how to identify whether the service provider is a non corporate entity).
The service received/consumed should fall under the type of service as listed in List –II. (See separate FAQs on how to identify the service).

If both these two conditions together are satisfied then the service tax will be applicable under the Partial Reverse Charge Mechanism wherein we (BD) will be required to deposit part of the service tax to the Government directly, and part of the service tax will be billed to us by the Service Provider