Registration under service tax act

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 November 2013 X is a service provider of manpower. W.e.f. 01.07.12, under reverse mechanism, service receiver has to create a liability of 75% of applicable service tax rate and avail credit thereof. balance 25% of applicable service tax rate shall be charged by the service provider on the bill and shall be reimbursed by the service receiver to the service provider. If in the instant case, X does not cross the threshold required for registration, then
1.) would he still be required to charge 25% of the applicable service tax rate to the service receiver on the bill?
2.) Since the limit for registration has not been crossed or is not likely to be crossed during the financial year and 25% of the applicable service tax is not charged on the bill, would it amount to violation of service tax provisions by the service provider?
Can somebody throw light on this issue?
Thanks in advance.

Aditya Maheshwari

Aditya Maheshwari (Expert)
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27 November 2013 Answer to both your questions is no from service provider perspective.

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