Reverse charge mechanism

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This query is : Resolved

Sidharth (Querist)

06 April 2013 My question is :

Service provider provides Supply of man power service,
Accordingly the service provider has to bear 25% of the service tax liability and service recipient has to bear 75% of the liability.

So,For eg :
Value of service provided = Rs. 100
Service provider has to bear=3.09 (ie 25% of 12.36)
Service recipient has to bear=9.27 (ie. 75% of 12.36)
Now, if the service provider charged whole service tax to the service recipient.
How much service tax can service recipient recover from service provider ?

Please help,
Reply asap !
Thank you.

CA KRISHNA KUMAR DARUKA

CA KRISHNA KUMAR DARUKA (Expert)

07 April 2013 If the service receipient is any of the following:

any company formed or
registered under the
Companies Act, 1956 (1 of
1956) or a business entity
registered as body corporate
located in the taxable
territory;

and the service provider is any one of the following:

Individual (prop )
/Partnership firm (registered
or unregistered) /HUF

then service receipient should only pay to service provider service tax on 25% of the value of service provided. If service provider has charged service tax on 100% of the service provided then service receipient should deduct the excess service tax charged by the service provider and pay service tax on 75% value directly to Government.

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