07 January 2017
In reverse charge machanism -: As you aware that reverse charges is applicable on ocean freight w.e.f. 01-06-2016. My query is that, our overseas agent has issued us debit note against ocean freight charges in USD. But somewhat the USD amount is charged by Agent is more than the quotation. So, we've issued them debit note and get credit note against our debit note. Now my query is that, Shall we pay service tax on reverse charges on the original debit note issued by agent OR shall we adjust service tax against debit note issued by us to agent.
For Example- Debit note issued by Agent Ocean Freight USD 4500@68 ₹ 3,06,000.00 ------------------------------------------------------------------------------ Payable to Agent ₹ 3,06,000.00 ------------------------------------------------------------------------------
Service tax on reverse charge S.Tax @ 4.2% 12,852.00 Ed. Cess @ .15% 459.00 Sr. Ed. Cess @ .15% 459.00 ----------------------------------------------------------------------------- Service tax payable 13,770.00 -----------------------------------------------------------------------------
Debit note issued by us to agent against above debit note (or you can say credit note issued by agent agent ag. Debit note of USD 4500) Ocean Freight USD 1000@68 68000
So now, shall we pay whole amount of service tax i.e. Rs. 13770/- or pay after claiming cenvat credit on debit note issued by us to agent.
CAclubindia
