Reverse charge

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 January 2015 A Client is not registered under service tax.
A client is covered under Reverse Charge Mechanism. But he is not registered under service tax and thus have not paid any service tax and filed service tax return.

Is there any exemption limit for payment under Reverse Charge Mechanism?

If NO. Will he liable to pay Interest for late payment and
penalty and from which period?

Please guide me soon.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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14 January 2015 No exemption limit under Reverse charge mechanism.
Yes he is liable to pay interest for late payment and penalty.

The Point of Taxation, in case of RCM is -
In case if the payment was made to the Service Provider and the debt cleared within 6 months of completion of Service, the date on which payment is made to Service Provider.
However, in case if payment was not made to Service Provider within 6 months of completion of Service, the Point of Taxation would become the date of completion of Service. Which means that Service Tax is anyway payable, in addition interest is also payable.