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Ssp exemption

CA Amisha (Practicing ) (161 Points)

31 October 2014

Hi can anyone pls tel me whether the turnover earned under reverse charge mechanism is eligible for 10lakh exemption ? Should that be added for getting the aggregate value ?

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6 Replies

CA Amisha (Practicing ) (161 Points)
Replied 31 October 2014

My question is from service provider's point of view.

Vinay Garg (Service Tax Expert) (775 Points)
Replied 31 October 2014

Hello Amisha,

In case of reverse charge, service receiver has to pay service tax.

It is not the liability of service provider to pay tax thereon.

So, while calculating aggregate value, services provided under RCM should be ignored because SP is not liable to pay tax thereon.

However if it the case of Partial Reverse Charge like in case of Works Contract i.e. 50-50, the portion on which SP is liable to pay tax should be considered ignoring the portion on which he is not liable to pay tax.

CA Amisha (Practicing ) (161 Points)
Replied 31 October 2014

So if the SP's taxable turnover is 900000 (excluding 200000 turnover of works contract) . , for the purpose of aggregate value calculation the turnover to be considered wil be - 900000 + 100000 (the amount on which he is liable to pay ST) . Am I correct ?