100% st charged by service provider under rcm

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Querist : Anonymous

Querist : Anonymous (Querist)

28 March 2015 Dear sir
in respect of work contract under reverse charges the service provider has charged 100% service tax instead of 50%, but mistakenly the service recipient has also paid this 100% service tax amount to service provider under reverse charges.
please let me know. can service recipient (company) avail 100% cenvat credit or not if not also tell me the procedure to rectified it.

plz reply urgently

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 March 2015 After making 50% payment under RCM the company can claim 100% cenvat credit. Service provider has to file the return and claim refund for 50%.

Querist : Anonymous

Querist : Anonymous (Querist)

30 March 2015 Dear sir
i know that in reverse charges both service provider and service recipient have to pay 50%, 50% ST. but in my case the service recipient has already paid 100% ST to service provider and he has also deposited the same in govt a/c. please tell me
after paying 100% ST to service provider. in this condition does service recipient is liable to take 100% cenvat credit or not

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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30 March 2015 No he can't take 100% credit, he has to pay 50% under RCM and then only he can claim 100%. The liability to pay service tax can't be shifted. Service provider has to get refund for excess payment.

Querist : Anonymous

Querist : Anonymous (Querist)

31 March 2015 Dear Seetharaman sir
plz. solve my Query. actually my client has taken contract from one of the electrical company to repair it's electrical goods which is under warranty period, materials is supplied by my client and my client is partnership firm and electrical company is company. i think the reverse charges will be applicable but my client has not shown materials portion also charged 100% ST in the bill included materials. sir i am so shocked that if reverse charges is applicable why is that corporate electrical company is paying 100% ST to my client despite being in reverse charges and how that electrical company is availing ST input also no objection even from electrical company. please guide me on this issue.......

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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31 March 2015 Your client has to charge ST on service portion only, if no break up is available he can charge ST on 70% value(after availing abatement).
There is no problem for your client, since they are paying more service tax, it is only problem will be faced by the company.

Querist : Anonymous

Querist : Anonymous (Querist)

31 March 2015 Dear sir
in case of departmental inquiry the company may shifted the blame on my client that why my client had charged 100% ST instead of 50%,
and also let me know should i ask to my client to charges only 50% ST in the bill on service portion to rectified it.

your response awaited

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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31 March 2015 Yes it is better to advise your client to charge only 50% ST excluding material.

Querist : Anonymous

Querist : Anonymous (Querist)

31 March 2015 But sir also suggested me it is 100% sure that in this service RCM is to be applicable
take a look the work.
contract of repair & maintenance of electrical goods like A/C RO etc. and materials is supplied by me client. and my client is partnership firm and recipient is company.
because before i advised to my client to charge 50% ST under RCM. i want to be sure whether 100% RCM is applicable. i am confused because the service recipient corporate level company have a turnover 5000 CR. please reply...

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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31 March 2015 Yes 100% sure for this service RCM applicable. Your client or you can advise the company.

Querist : Anonymous

Querist : Anonymous (Querist)

02 April 2015 Dear sir
i have inquire in my client company the company is availing 100% ST credit, after paying 100% ST to my client. under RCM

please confirm whether it is possible or not
or it just a violation of ST.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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02 April 2015 It is violation of ST.

Querist : Anonymous

Querist : Anonymous (Querist)

02 April 2015 Dear sir
in case of inquiry can that company shift blame on my client that why my client has not shown materials portion and why he has charged 100% ST in the bill instead of 50%

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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02 April 2015 Only the service tax authorities question the company they will not accept shifting the blame.
Advice your client show the material portion and pay service tax at 50% excluding material portion.