Reverse charge mechanism
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
04 January 2014
A company is having out put services and input services... company output service tax is 1000 and input service tax is 100 ( 25% service provider + 75% service receiver i.e. the company)in the month sep 12... can company make the following procedure...
Out put service tax is 1000
service tax under RCM is 75
Total 1075
Input service tax credit 100
ST payable is 975
Out put service tax is 1000
service tax under RCM is 75
Total 1075
Input service tax credit 100
ST payable is 975
04 January 2014
yes the net payable is correct BUT
service tax liability of 75 as reverse charge can not be paid using ccr.
so pay that liability of 75 separately
and 1000 tax less 100 ccr = 900 separate
also in return you have to show your separate liabilities as receiver and provider
and then credit will only be allowed for output service.
REASON = as cenvat credit rules, credit of input service can be taken for providing output service.
hence for payment of your liability against your input service is not allowed to be paid using ccr, as that is only for output and not for input.
service tax liability of 75 as reverse charge can not be paid using ccr.
so pay that liability of 75 separately
and 1000 tax less 100 ccr = 900 separate
also in return you have to show your separate liabilities as receiver and provider
and then credit will only be allowed for output service.
REASON = as cenvat credit rules, credit of input service can be taken for providing output service.
hence for payment of your liability against your input service is not allowed to be paid using ccr, as that is only for output and not for input.
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