Billing on works contract service
This query is : Resolved
21 November 2012
With he introduction of Reverse Charge mechanism in service tax service receiver is liable for 50% of the service tax. My confusion in this outset is as follows,
Normally contractors are billing based on the agreed rates for the tendered BOQ (Description of work)and the service tax is also factored in on the rates agreed.
Query 1 - As rates are all inclusive in the bill claimed service tax is not shown separated.
Query 2 - as 50% liability is on receiver can the same be deducted and paid.
Normally contractors are billing based on the agreed rates for the tendered BOQ (Description of work)and the service tax is also factored in on the rates agreed.
Query 1 - As rates are all inclusive in the bill claimed service tax is not shown separated.
Query 2 - as 50% liability is on receiver can the same be deducted and paid.
21 November 2012
Query 1 :- Even if service tax is not shown seperately it has has to be calculated in reverse manner .
Query 2 :- Yes the service receiver as he is paying 50% of tax payable, he can deduct and pay.
Query 2 :- Yes the service receiver as he is paying 50% of tax payable, he can deduct and pay.
Message likes :
1 times
21 November 2012
Under Reverse charge mechanism, it is better to pay Service Tax as per the joint liability cast upon under Section 66 B of the Finance Act. Even if the service provider has paid 12.36%, Dept may raise a demand on you. Hence recover the excess amount of ST paid from the service provider and discharge your liability.
The service provider (Work contractor) should show 50% service tax separately being his liability under service tax.
If service provider charged ST in his Invoice, the service receiver has to remit 50% ST liability. While making final payment to the work contractor, the receiver has to deduct/recover the 50% of ST out of total ST charged under reverse charge mechanism.
The service provider (Work contractor) should show 50% service tax separately being his liability under service tax.
If service provider charged ST in his Invoice, the service receiver has to remit 50% ST liability. While making final payment to the work contractor, the receiver has to deduct/recover the 50% of ST out of total ST charged under reverse charge mechanism.
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- GSTR-1A How to update Invoice
- Excess salary payment.
- Current Account Opening for Sole Proprietorship with Udyam Certificate - Zero Turnover
- TDS on Purchase of Immovable Property by NRI from NRI
- Stamp Paper for partnership firm change new income tax 2025
- Capital gain from sale of house property
- SFT Cash Deposit in Current Account
- Annual return in Gst
- FORM 26A APPLICABILITY
- When TDS on GST applied
- Cash gift by grand mother to her grand daughter
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
- Claiming TDS deducted by builder on Hardship compensation and Corpus
- Address Change to another state of a Registered Trust with 12AB approval
- Updated return in budget 2026
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
