Reverse charge
This query is : Resolved
Rajiv sharma
(Querist)
29 November 2012
Reverse Charge under Service Tax -
X ltd takes a construction contract from Y and sub contracts the work to Z.
Initially, in this Case even though X Ltd is a Service Provider. Will X Ltd become a Service Receiver if he sub contracts the work to Z???
X ltd takes a construction contract from Y and sub contracts the work to Z.
Initially, in this Case even though X Ltd is a Service Provider. Will X Ltd become a Service Receiver if he sub contracts the work to Z???
Amol S Joglekar
(Expert)
29 November 2012
Yes, it is service receiver so far as Z is concerned AND service provider so far as Y is concerned.
Message likes :
1 times
Rajiv sharma
(Querist)
30 November 2012
Thanks for the reply Amolji.
Please confirm if the following is ok then:
1) X ltd will pay 50% of the service tax for being service recipient .
2) Z will collect 50% of the service tax on the work contract.
3) X Ltd will bill and collect service tax on the entry work contract charged to Y.
4) X ltd can claim Cenvat credit of 50 % Service Tax paid as Service Recipient and 50 % paid to Z ltd for sub contracting.
Please confirm if the following is ok then:
1) X ltd will pay 50% of the service tax for being service recipient .
2) Z will collect 50% of the service tax on the work contract.
3) X Ltd will bill and collect service tax on the entry work contract charged to Y.
4) X ltd can claim Cenvat credit of 50 % Service Tax paid as Service Recipient and 50 % paid to Z ltd for sub contracting.
04 December 2012
X Ltd. :
(a) Charge 100% service tax on the invoice raised on Y.
(b) Pay 50% of service tax on contract charges paid to Z (assuming Z is an individual or HUF or firm).
Z:
Charge 50% service tax on the invoice raised on X Ltd.
X Ltd. can claim CENVAT credit of 50% paid to Z and 50% paid under reverse charge.
(a) Charge 100% service tax on the invoice raised on Y.
(b) Pay 50% of service tax on contract charges paid to Z (assuming Z is an individual or HUF or firm).
Z:
Charge 50% service tax on the invoice raised on X Ltd.
X Ltd. can claim CENVAT credit of 50% paid to Z and 50% paid under reverse charge.
Message likes :
1 times
Rajiv sharma
(Querist)
04 December 2012
Thanks Siddhartha for the confirmation.
Regards, Rajiv Sharma
Regards, Rajiv Sharma
04 December 2012
You are welcome. You should use the thanks button to convey your thanks.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- GST on reimbursement of expenses
- Due date for filing return for the partner in partnership subjected to Tax Audit
- Visiting card purchase
- Query on effect of registration of property
- Goodwill transfer of deceased father’s firm – ICAI applying a 27.04.2026 cut-off to the 3 year limit
- Number of years as per AS amortisation of Goodwill
- Equity Share Sale and Purchase
- Additional trade name
- Wrong CMPo8 file
- Whether output tax is taken credit by purchaser
- Classification of income of P Ltd company as business or profession
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Need to correct "Whether it is last installment " response in Form 26 QB
- " Income from House Property " in joint names of co-owners
- REGARDING TDS RETURN OF FORM 27Q
- Notice under e-Verification Scheme
- GST demand notice for ITC reversal against exempted supply.
- RCM ON SECURITY CHARGES FROM INDIVIDUALS
- How to get money back from delisted company
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
