Service tax on director remunaration ,manpower service & gta

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 December 2012 Dear CCI members
I have 3 doubts.
1.One pvt limited company is deducting tdsU/s194j from directors remunation(category of director unknown) whether the company have to pay service tax under reverse charge mechanism.
2.one pvt ltd company is avialing the manpower service from a individual(the individual is not regd as per ST act),did the pvt co have to pay service tax75%X12.36
3.one pvt company paying st on all frieght inward/outward,is it right or wrong

Whether the pvt limited company can avial cenvat credit on the follwing three

Amol S Joglekar

Amol S Joglekar (Expert)
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25 December 2012 01. Except for employer employee relation.... other payment to director is liable for service tax. Hence liable for reverse charge as well.
02. Yes. The co is liable for service tax.
03. This is a good and correct practice by the company

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Querist : Anonymous

Querist : Anonymous (Querist)

25 December 2012 Dear Mr Amol
wther the pvt limited company can avial cenvat credit on the above 3 question.
the company is paying25%X12.36 on st on freight inward /outward

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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25 December 2012 Cenvat Credit can not be availed on the outward freight but it can be claimed on freight inward.

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CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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25 December 2012 If the company is deducting tds u/s 194J then service tax will also be paid under reverse charge.
simply if section 194J is applicable, reverse charge will automatically be applicable and if TDS is deducted u/s 192 then reverse charge will not be there.

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Querist : Anonymous

Querist : Anonymous (Querist)

25 December 2012 Dear amit
Thankx for your reply,
The pvt ltd company is not paying S tax on manpower service,the argument of the company is, the service provider(indidual) not regd with st and the cmpany is deducting tds u/s194c so no need to deduct s tax on reverse charge mechanism.

The company is paying st on freight inward/outward & availing cenvat credit.as mention by you the company should not take cenvet credit on freight outward,what the company should do now to rectify the earlier mistake

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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25 December 2012 1. The company will have to service tax under reverse charge even if service provider(Individual) is not registered with ST.
2. Service tax credit is not allowed for freight on outward. The company should reverse the credit in the current month.
Note: It is pertinent to note that some judgements are given in the faour of the assessee for taking credit of ST on outward freight but the same is highly disputable and dept is not accepting it.

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