Applicability of reverse charge
This query is : Resolved
10 November 2015
Dear sir,
Our client is registered under interior decorators service. They take up projects where both vat and service tax are involved, does this constitute to works contract and is reverse charge applicable? For reverse charge to be applicable should they be registered under works contract service which they are not. Kindly clarify if they fall under the reverse charge. Do they raise a bill charging 14% service tax or 7% service tax.
Regards
Swetha
Our client is registered under interior decorators service. They take up projects where both vat and service tax are involved, does this constitute to works contract and is reverse charge applicable? For reverse charge to be applicable should they be registered under works contract service which they are not. Kindly clarify if they fall under the reverse charge. Do they raise a bill charging 14% service tax or 7% service tax.
Regards
Swetha
CA R SEETHARAMAN
(Expert)
15 November 2015
Yes this is a works contract. Reverse charge applicable when service is provided to company. In case of reverse charge 70% of 7% is payable. 30% abatement available.
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