14 August 2013
Suppose a Rent-a-Cab Service provider (other than a company) raises a bill of Rs. 10,000 and charges Service Tax thereon @ 4.944%. Hence, the total bill amount comes to be Rs. 10,494. My questions are: 1. Whether he has taken the abatement? 2. What will be our Service tax Liability under Reverse Charge(as a Corporate entity) to: a. The Government and b. The Service Provider? Now, what if he charges Service Tax @ 12.36%? what would be our liability. Please help. Thank you.
15 August 2013
If receive receiver is a corporate business entity and service provider is non-corporate entity, the RCM is applicable and he receiver of service is liable to pay service tax @ 40% of 12.36% irrespective of the fact that he has taken abatement.
Please check you can also avail abatement if you satisfy other conditions.
disclaimer- all answers are given as per the facts narrated by you. Answer may differ after study of full facts/statements/agreements etc. involved in the case
so that means the Service Receiver is going to pay the 40% of Service tax to the government irrespective of the fact that the SP has charged the same in the Bill?
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