Reverse charge mechanism
This query is : Resolved
18 August 2012
Sir,
please let me know why we cannot pay service tax in respect of services under reverse charge mechanisam like Manpower Consultant etc...out of cenvat balance available.Why we need to pay by Cash. Is there any notification ???
please let me know why we cannot pay service tax in respect of services under reverse charge mechanisam like Manpower Consultant etc...out of cenvat balance available.Why we need to pay by Cash. Is there any notification ???
18 August 2012
YOU CAN NOT UTILISE CENVAT CREDIT BALANCE FOR THE PURPOSE OF SERVICE TAX LIBILITY UNDER REVERSE CHARGE.
18 August 2012
Please give supportings to your view ???
18 August 2012
under reverse charge, st liability is not real libility of service receiver, ST liability is transfer from st provider to st receiver.
Guest
Guest
(Expert)
18 August 2012
Service Receiver is liable to pay taxes under reverse charge. Cenvat cannot be utilised against this payment so it shall be an explicit cash outflow. Further once the tax is paid under reverse charge the same can be utilised as Cenvat subject to Cenvat credit rules.
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