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Partial reverse charge- works contracts

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29 April 2013 Hi all, If the Service Provider charges 12.36% st on 30% of the total amount...the effective rate of tax would come upto 3.708%. My doubt is should both the service provider and the service receiver should pay 3.708% each( under works contract reverse charge mechanism 50:50) or should it be just 50% of 3.708%? The calculation is as follows:

Total amount of invoice- 465186

Service Tax 12.36% on 30% of Total amount- Rs.17249.10

My question is what would be the amount of ST payable by the service receiver under reverse charge mechanism?

Thankyou
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CA Vikas Acharya

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CA Vikas Acharya (Expert)
29 April 2013 1ST DO 50 50 OF THE TOTAL VALUE
NOW USE THE RULE THAT SR AND SP BOTH CAN TAKE THE ABATEMENT,
HENCE SP = 12.36% OF 30% AND
SR = 12.36% OF 30%
BEACAUSE ABATEMENT IS ON SERVICE AND NOT ONLY FOR SR.

ALSO THE SAME IS SUGGESTED BY CBEC, IN S.TAX EDU GUIDE
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