Reverse charge
This query is : Resolved
19 October 2013
Sir,
Please address me for the below mentioned Query:
Sir, in case of joint charge,if the service providor is not mentioning the amount of service tax in the bill i.e. he is not following the Rule 4A of CENVAT credit rules,2004 then whether the Service Receipient should consider the bill amount inclusive of Service Tax or not i.e. the service receipient should give payment of reverse charge considering bill amount inclusive or exclusive of service tax.
The below is the situation:
a)he is not a Small Service Providor
b)the line "inclusive of service tax" is not mentoned in bill.
c)The same Contarctor of Man Supply is charging service tax in another bill.
Please try to mention the relevant section for inclusion of service tax in bill.
Please address me for the below mentioned Query:
Sir, in case of joint charge,if the service providor is not mentioning the amount of service tax in the bill i.e. he is not following the Rule 4A of CENVAT credit rules,2004 then whether the Service Receipient should consider the bill amount inclusive of Service Tax or not i.e. the service receipient should give payment of reverse charge considering bill amount inclusive or exclusive of service tax.
The below is the situation:
a)he is not a Small Service Providor
b)the line "inclusive of service tax" is not mentoned in bill.
c)The same Contarctor of Man Supply is charging service tax in another bill.
Please try to mention the relevant section for inclusion of service tax in bill.
20 October 2013
If service tax amount is not mentioned separately, in my opinion you can't consider the same as inclusive of tax for payment of service tax
Message likes :
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21 October 2013
Sir,
Can you also refer me the relevant sections for the same.
Can you also refer me the relevant sections for the same.
22 July 2025
Great detailed query! Here's the explanation and relevant references regarding service tax invoicing and reverse charge when service tax is not separately mentioned in the bill:
Scenario Recap:
Service provider does not mention service tax separately in the bill.
The bill does not say “inclusive of service tax.”
Service provider is not a small service provider (so service tax is applicable).
Sometimes the same provider charges service tax separately in other bills.
You need to know whether to pay reverse charge on the bill amount inclusive or exclusive of service tax.
Legal & Practical Position:
1. Rule 4A of CENVAT Credit Rules, 2004 (Invoice rules):
Requires service provider to show service tax separately in the invoice.
The invoice should mention amount of service tax charged or at least state that the amount is inclusive of service tax.
2. Section 67 of Finance Act, 1994 (Determination of value):
If service tax is not shown separately in the invoice, the value of taxable service includes service tax.
But this only applies if invoice says "inclusive of service tax."
If no such mention, it means the amount is exclusive of service tax.
3. In your case:
Since service tax is not mentioned separately and
The bill does not say “inclusive of service tax,”
The amount should be treated as exclusive of service tax.
4. Reverse Charge Implication:
The service receiver must pay service tax under reverse charge on the value exclusive of service tax.
The service tax amount payable should be calculated separately and added on top of the bill amount.
Summary Table:
Condition Implication
Service tax shown separately Pay tax on bill amount as stated
Bill states “inclusive of service tax” Tax is included in bill amount
Service tax not mentioned & no “inclusive” Treat bill amount as exclusive of service tax
References:
Rule 4A, CENVAT Credit Rules, 2004: Mandates invoice format and separate mention of tax.
Section 67, Finance Act, 1994: Valuation rules for taxable services.
CBEC Circulars clarifying invoice requirements and treatment when tax not separately shown.
Scenario Recap:
Service provider does not mention service tax separately in the bill.
The bill does not say “inclusive of service tax.”
Service provider is not a small service provider (so service tax is applicable).
Sometimes the same provider charges service tax separately in other bills.
You need to know whether to pay reverse charge on the bill amount inclusive or exclusive of service tax.
Legal & Practical Position:
1. Rule 4A of CENVAT Credit Rules, 2004 (Invoice rules):
Requires service provider to show service tax separately in the invoice.
The invoice should mention amount of service tax charged or at least state that the amount is inclusive of service tax.
2. Section 67 of Finance Act, 1994 (Determination of value):
If service tax is not shown separately in the invoice, the value of taxable service includes service tax.
But this only applies if invoice says "inclusive of service tax."
If no such mention, it means the amount is exclusive of service tax.
3. In your case:
Since service tax is not mentioned separately and
The bill does not say “inclusive of service tax,”
The amount should be treated as exclusive of service tax.
4. Reverse Charge Implication:
The service receiver must pay service tax under reverse charge on the value exclusive of service tax.
The service tax amount payable should be calculated separately and added on top of the bill amount.
Summary Table:
Condition Implication
Service tax shown separately Pay tax on bill amount as stated
Bill states “inclusive of service tax” Tax is included in bill amount
Service tax not mentioned & no “inclusive” Treat bill amount as exclusive of service tax
References:
Rule 4A, CENVAT Credit Rules, 2004: Mandates invoice format and separate mention of tax.
Section 67, Finance Act, 1994: Valuation rules for taxable services.
CBEC Circulars clarifying invoice requirements and treatment when tax not separately shown.
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