Difference between abated value & non abated value

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Prabhakaran (Querist)
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16 July 2013 Hi Sir,
Our company is in ecommerce business (online travel agency & Taxable territory) and having lots of cab vendor whose status mostly individual. The vendor is raising invoices without service tax. now my query is do we need to pay ST under reverse charge method @ 4.95% on the invoice value or 12.36%? how to find out the non abated value?

One more invoice from recruitment consultancy whose status is also individual and raised invoice without ST. how to handle it? can i ask the consultancy to revise the invoice after adding ST 3.09% ?

Ganeshbabu K

Ganeshbabu K (Expert)
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16 July 2013 1)
(i)Tax on 40% of value by service receiver and Nil by service provider.

(ii)If the service provider intends to avail Cenvat credit, he can pay service tax on balance 60%.

(iii)Thus, service receiver is liable to pay service tax only on 40% value.

2)But let me tell you that if bill of service provider is in the name of company then only reversecharge applicable and reversecharge not applicable if bill is in the name of employees or other indiviuals [which may be possible at the time of re-imbursements and conveyances]

3)it is 40% on 12.36% and this rate is to be applicable on gross amount charged inn bill

4)irrespective of whether he charged his part of service tax in his bill service receiver under obligation to remit his part of service tax which is fixed vide Notification 30/2012 dated 20.006.2012

Thanks & regards
Ganesh babu k

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