Notification 15/2012,dated 17.03.2012

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Querist : Anonymous

Querist : Anonymous (Querist)

24 March 2012 Dear sir,

I have quarry on this notification regarding reverse charge mechanism for GTA,supply of manpower and work contract there is part of service tax service receiver has to pay and part has to borne by the provider. my question is as follows:
1. when this notification is with effect from.

2. how is work order issued for man power supply in relation to service tax rate.

3. is this 12.36*25% to be mentioned in work orders or full amount.

4. how is accounting is to be done in service receivers books of accounts.

kindly clarify the above querry.

regards.
shreenivas
8277104221

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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24 March 2012 i) w.e.f the date the president of India give assent to the Finance Bill,2012.

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Querist : Anonymous

Querist : Anonymous (Querist)

24 March 2012 sir,

i asked to answer all my four question. please give the answer to all my questions.

thanks and regards.]
shreenivas s.d.
8277104221

Querist : Anonymous

Querist : Anonymous (Querist)

26 March 2012 Please give Proper reply to me, it is urgent for me.

regards.
shreenivas s.dotihal

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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03 August 2024 Notification No. 15/2012-Service Tax, dated 17th March 2012, provides details about the reverse charge mechanism and the service tax obligations for different types of services, including Goods Transport Agency (GTA) services, supply of manpower, and work contracts. Here’s a detailed explanation to address your queries:

### 1. **Effective Date of Notification No. 15/2012:**

- **Effective Date:** Notification No. 15/2012-Service Tax came into effect from **1st April 2012**. This notification specifies the reverse charge mechanism applicable for various services, including GTA, manpower supply, and work contracts.

### 2. **Work Order Issuance for Manpower Supply:**

- **Service Tax Rate:**
- **Reverse Charge Mechanism:** Under Notification No. 15/2012, for manpower supply services, the reverse charge mechanism applies, where the service receiver is required to pay a part of the service tax. The service provider is responsible for the balance.
- **Rate of Service Tax:** The service tax rate for manpower supply services is 12% (effective rate subject to changes). The reverse charge mechanism typically requires the service receiver to pay 50% of the service tax, and the provider is liable for the remaining 50%.

- **Work Order Issuance:**
- **Mentioning Service Tax:** The work order should mention the total amount payable for the manpower supply services, including the service tax. The work order should clearly specify the service tax amount and the portion attributable to the service receiver and service provider, based on the reverse charge mechanism.

### 3. **Service Tax Amount in Work Orders:**

- **Calculation and Mentioning:**
- **Service Tax Rate Application:** The service tax calculation should be based on the applicable rate. If the rate is 12%, and assuming the reverse charge mechanism applies (where the receiver pays 50%), the service receiver would pay 6% of the service tax on the value of the service.
- **Work Order Details:** The work order should reflect the full amount of the service tax based on the gross value of the service. For example, if the total service value is ₹100, the service tax at 12% would be ₹12. The receiver would be responsible for ₹6 (50% of ₹12), and the provider would be responsible for ₹6 (50% of ₹12). This should be clearly mentioned in the work order.

### 4. **Accounting in Service Receiver’s Books:**

- **Accounting Entries:**
- **Service Tax Liability:** The service receiver needs to account for the service tax paid under the reverse charge mechanism. The accounting entries should reflect the service tax liability and input credit (if eligible).
- **Journal Entries:**
- **Service Received:**
- Debit: **Service Expense Account** (Gross amount + Service Tax)
- Credit: **Accounts Payable** (Gross amount + Service Tax)
- **Service Tax Payable (Reverse Charge):**
- Debit: **Service Tax Input Credit Account** (Amount paid by service receiver)
- Credit: **Service Tax Payable Account** (Amount payable under reverse charge)

### **Summary:**

1. **Effective Date:** Notification No. 15/2012 is effective from 1st April 2012.
2. **Work Order Issuance:** The work order should state the total service amount including service tax, with a breakdown of the tax liability as per the reverse charge mechanism.
3. **Service Tax Amount:** Mention the full service tax amount in the work order and specify the portion borne by the service receiver and provider as per the reverse charge mechanism.
4. **Accounting Entries:** Reflect the service tax liability and input credit appropriately in the service receiver’s books of accounts.

For accurate and compliant processing, it is advisable to consult a tax professional or accountant familiar with the latest tax regulations and notifications.

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