How to calculate tax liablity under reverse charge ?
This query is : Resolved
CA Sahil Singla..
(Querist)
28 October 2012
Sir
My partnership firm avail service under rent a Cab scheme.I am dealer of goods only.
We know that Rent a Cab scheme is eligible for 60% abatement. Also, as per partial reverse charge mechanism, my liability as service provider is only to the extent of 40% with abatement. Since i can not utilise service tax paid as cenvat, does this mean that Service tax is to be paid by me as "Value of Service * 40% * 40% ? For eg. for payment of 1000 rs, my service tax is 12.36% of Rs. 160 ?
My partnership firm avail service under rent a Cab scheme.I am dealer of goods only.
We know that Rent a Cab scheme is eligible for 60% abatement. Also, as per partial reverse charge mechanism, my liability as service provider is only to the extent of 40% with abatement. Since i can not utilise service tax paid as cenvat, does this mean that Service tax is to be paid by me as "Value of Service * 40% * 40% ? For eg. for payment of 1000 rs, my service tax is 12.36% of Rs. 160 ?
MOHAMMAD SALIM
(Expert)
29 October 2012
No the service tax to be paid as under by service recipient:-
Abated Value: Rs1000 X 40%X 12.36% = 49.44
non abated value: Rs 1000 X 12.36% X 40%= 49.44
From above it is evident that the service recipients liability is restricted to net rate of 4.944% of the amount of bill.(excl service tax).
Hope this would settle the issue...
Abated Value: Rs1000 X 40%X 12.36% = 49.44
non abated value: Rs 1000 X 12.36% X 40%= 49.44
From above it is evident that the service recipients liability is restricted to net rate of 4.944% of the amount of bill.(excl service tax).
Hope this would settle the issue...
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
- Depreciation Chart Companies Act
- GST Audit whether Govt Companies are exempt?
- PTRC Show Cause Notice on Email
- Accounting treatment of AMC alongwith the purchase of Laptop
- Unable to File TDS Q2 Return – New TRACES Portal Error
- GST Treatment of Purchases with GST Paid where Outward Supplies of Manufactured CattleFeed Exempt
- MSME disclosure and disallowance
- Issuing of delivery challan by seller of goods
- Taxation of crypto futures in India Fy 2026- 2027
- Transfer of Physical Stock Between Two Proprietorship Concerns
- Condonation Request sec 119(2) b -Enhancement Limit of Leave Exemption prior to AY 2023
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
