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Whether reverse charge is applicable ? (Service Tax)

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This query is : Resolved


( Author )
04 June 2013

Hello everyone,

one of our client is suppying labour on contract basis to a pvt ltd company.

i am applying for his service tax registration.

My questions:
1. whether reverse charge is applicable in this case and if yes how much should my client pay and how much should the other party ?
2. what precaution should should i take while filling the ST-1 form ?


Ganeshbabu K

( Expert )
14 June 2013

1)Reverse charge is applicable under service manpower supply of services..if those labour is work under supervision of service receiver.

service provider should claim 25% of service ..
service receiver is responsible for payment of 75% of service tax..

2)you may register under service of manpower supply of services..


Thanks ®ards
Ganeshbabu k


CA Abhishek Singh

( Author )
17 June 2013

my client is an individual and suppose his receipts are less than 10 lacs then can he claim exemption from payment of service tax under reverse charge.

suppose value of taxable service is rs.100/- therefore my client i.e. service provider (individual) liability is Rs.25*12.36% ie. Rs. 3.09

if my client is claiming ssi exemption the it is mandatory for him to Rs.3.09 to the government.


Ganeshbabu K

( Expert )
17 June 2013

1)The small service provider exemption of 10 lakhs not available when tax is payable under reverse charge.

2)i dont think there is any exemptions to ssi

http://www.caclubindia.com/articles/understanding-reverse-charge-mechanism-in-service-tax-17538.asp

http://www.caclubindia.com/articles/registration-and-payment-under-reverse-charge-concept-17323.asp

Thanks & regards
Ganesh babu k


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