Reverse charge
This query is : Resolved
21 November 2012
Hello
We have to pay 75% service tax on reverse charge basis on services received from contractors.
I have a query that if the service provider's services are less than Rs 10,00,000 (not liable to pay st), will we as company, liable to pay service tax on 75% payment.
We have to pay 75% service tax on reverse charge basis on services received from contractors.
I have a query that if the service provider's services are less than Rs 10,00,000 (not liable to pay st), will we as company, liable to pay service tax on 75% payment.
Viral Vora
(Expert)
21 November 2012
the above exemption shall not be available to the person made liable to pay service tax under sec (68)(2)
The liability of the service provider and service recipient are different and independent of each other. Thus in case the service provider is availing exemption owing to turnover being less than Rs 10 lakhs, he shall not be obliged to pay any tax. However, the service recipient shall have to pay service tax which he is obliged to pay under the partial reverse charge mechanism.
The liability of the service provider and service recipient are different and independent of each other. Thus in case the service provider is availing exemption owing to turnover being less than Rs 10 lakhs, he shall not be obliged to pay any tax. However, the service recipient shall have to pay service tax which he is obliged to pay under the partial reverse charge mechanism.
vikas Manglani
(Expert)
22 November 2012
Basic exemption is not applicable to service recipient in case of reverse charge mechanism.
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