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Reverse charge

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(Querist)
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.
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Viral Vora

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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.
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CA, CMA

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CA, CMA (Querist)
21 November 2012 thank..absolutely agreed with you..
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vikas Manglani

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vikas Manglani (Expert)
22 November 2012 Basic exemption is not applicable to service recipient in case of reverse charge mechanism.
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