I am working in a Private Limited company. I got an invoice from an proprietorship concern for a contract work done. In the invoice the service tax charged @ 7.416%(after abatement of 40%). Please guide me whether we have to pay Service Tax on RCM basis. If yes, on what amount?
01 June 2015
I assume that the invoice pertains to works contract. In that case, the contractor needs to charge Service tax of 50% of 7.416% i.e. 3.708%. You need to get the invoice amended accordingly.
You need to pay the balance Service tax amount of 3.708% from your own account to the Government under reverse charge basis.
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