Reverse charge

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 January 2014 OUR IS PVT LTD COMPANY. THE ENTITY WHO SUPPLIES MAN POWER TO US IS A FIRM. THE FIRM IS CHARGING 100% SERVICE TAX ON THEIR BILL.
IS THIS ALLOWED IF THEY CHARGE 100% AND PAY TO SERVICE TAX DEPT. OR ELSE IS IT COMPULSORY THAT THEY CHARGE 25% AND REST 75% IS TO BE PAID BY US ?

Ganeshbabu K

Ganeshbabu K (Expert)
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16 January 2014 Legal liability is of service receiver. That liability does not disappear even assuming that the service provider has paid the service tax. The department can insist on payment of service tax from you

[In respect of past, may be you can get away by claiming that it is only procedural mistake and no revenue loss. However, for future, please do not do it].
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Ganeshbabu K

Ganeshbabu K (Expert)
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16 January 2014 1)Service provider should charge only his part of service tax

2)Service receiver to pay service tax of his part by GAR-7 challan

3)Service receiver liable for only his part and not entire amount, even if service provider does not charge his portion of service tax.

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