We, a Pvt Ltd Co., are executing works contract of Public Ltd. Co. (PSU). In our bill we levy Service Tax separately but PSU is not paying service tax payment to us and they pay 100% service tax directly in their own name.
When Full Service Tax is paid by Service Receiver, are we not liable to pay the same under RCM? what is our Responsibility? Is there any such provision / clarification / notification that when service receiver paid 100% tax, service provider is not liable to tax?
Guest
Guest
(Expert)
05 March 2016
Sir,
When u are a private limited company, reverse charge mechanism will not applicable for ur service under notification 30/2012 ST. Hence u cannot claim that the service receiver has paid 100% of amount to government and argue to ST department that u are not liable to ST.
05 March 2016
Thank you very much for your prompt reply. Sir, though we are liable to pay service tax, PSU is paying it and deducting from our bill. Now if we also pay ST then payment will be double on same transaction. And PSU is not ready either for making payment to us or paying in our name. what is remedy.
Guest
Guest
(Expert)
05 March 2016
Dear Ashok,
The only remedy is to convince and make understand the PSU that the liability of this transaction is on u. Because the act is clear on this issue. U cannot later on litigate with the ST department as the situation will go against u. You kindly share the notification 30/2012 to the PSU and initmate him about the prevailing law in force
CAclubindia
