Reverse Charge
This query is : Resolved
Anuj Jhanwar
(Querist)
13 June 2017
wheather reverse Charge applicable in case service provider is company (private or public)
CA R SEETHARAMAN
(Expert)
13 June 2017
Reverse charge not applicable if service provider is a company.
Anuj Jhanwar
(Querist)
13 June 2017
sir under which section so that i can get more cleared about the same
22 July 2025
Great question! Here’s a clear explanation about reverse charge applicability when the service provider is a company:
Is Reverse Charge Applicable if Service Provider is a Company?
Generally, Reverse Charge Mechanism (RCM) applies only when the service provider is an individual, HUF, firm, or any person other than a company.
If the service provider is a company (private or public), reverse charge is usually NOT applicable.
Legal Reference:
This is based on the Finance Act and Service Tax Rules.
Most reverse charge notifications specify the category of service providers to whom it applies, often excluding companies.
For example, in the reverse charge on “Manpower supply service”, the liability is on the service receiver only if the service provider is an individual, HUF, partnership firm, or a casual taxable person— not a company.
The relevant notification:
Notification No. 30/2012-ST (or the latest applicable reverse charge notification), which states the categories of service providers under reverse charge.
How to check:
Go through the latest Reverse Charge Notifications issued by CBIC/CBEC.
Look at the exact language mentioning service provider categories.
The Explanation or Notes in these notifications clarify applicability to companies.
Is Reverse Charge Applicable if Service Provider is a Company?
Generally, Reverse Charge Mechanism (RCM) applies only when the service provider is an individual, HUF, firm, or any person other than a company.
If the service provider is a company (private or public), reverse charge is usually NOT applicable.
Legal Reference:
This is based on the Finance Act and Service Tax Rules.
Most reverse charge notifications specify the category of service providers to whom it applies, often excluding companies.
For example, in the reverse charge on “Manpower supply service”, the liability is on the service receiver only if the service provider is an individual, HUF, partnership firm, or a casual taxable person— not a company.
The relevant notification:
Notification No. 30/2012-ST (or the latest applicable reverse charge notification), which states the categories of service providers under reverse charge.
How to check:
Go through the latest Reverse Charge Notifications issued by CBIC/CBEC.
Look at the exact language mentioning service provider categories.
The Explanation or Notes in these notifications clarify applicability to companies.
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