Reverse charge liability arise on cash transaction or not
This query is : Resolved
06 July 2014
Suppose Xyz Ltd. co. received a renting or hiring motor vehicle service from Mr. A who is an individual. In the books of Co. if company recorded this transaction as: Conveyance Exp a/c Dr. To Cash. a/c So in the hands of company service tax reverse charge liability arise or not on this cash transaction. (Party name does not arised anywhere in the books ) Please reply me for proper guidlines.
06 July 2014
is service tax applicable on service rendered and payment collected in cash?
.
Yes,definetely Service tax applicable. But if you have not shown cash received in your books and not raised invoice no need to pay service tax
.
.
in the same way
.
Let me tell you levy of service tax will not depend on cash or bank payment/collection
.
.
.
1)No doubt you are liable to discharge liability under reverse charge if individual given bill infavour of your company
.
.
whether u paid cash for it or cheque for it ,no difference,,
.
2)No doubt you are not liable to discharge service tax liability if cab provider gives bill infavour of indivual(employees)no need to pay service tax
.
.
So i can advise u like this
.
If you don't want to pay reverse charge service tax Better take Bills in the name of your employees and account it as re-imbursement expence paid to them
.
.
No reversecharge levy here
.
Because service receiver is not company but individual,
.
So it is the responsibility of service provider to charge service tax on bill
...
.
.
So it is legal way to avoid reversecharge obligations
.
Yes,definetely Service tax applicable. But if you have not shown cash received in your books and not raised invoice no need to pay service tax
.
.
in the same way
.
Let me tell you levy of service tax will not depend on cash or bank payment/collection
.
.
.
1)No doubt you are liable to discharge liability under reverse charge if individual given bill infavour of your company
.
.
whether u paid cash for it or cheque for it ,no difference,,
.
2)No doubt you are not liable to discharge service tax liability if cab provider gives bill infavour of indivual(employees)no need to pay service tax
.
.
So i can advise u like this
.
If you don't want to pay reverse charge service tax Better take Bills in the name of your employees and account it as re-imbursement expence paid to them
.
.
No reversecharge levy here
.
Because service receiver is not company but individual,
.
So it is the responsibility of service provider to charge service tax on bill
...
.
.
So it is legal way to avoid reversecharge obligations
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