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Reverse charge mechanism

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This query is : Resolved

Phani (Querist)
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04 May 2014 My query
I am an employee of Andra Pradesh State Financial Corporation

- APSFC is using man power supply services from local service provider being Individual

-SP is not registered under Service tax rules

-we need to pay amount monthly on invoice raised by him.Eg Rs.24000/-( no break up is there in invoice)

- Now what is liabilty of APSFC (SR)
- to pay ST of 100% (12.36%) on Rs.24000/-
or
- to pay ST of 75%(12.36%) on Rs.24000/-

- How much APSFC need to pay to the SP
- Rs.24000- 240(TDS)-2225(75%of 12.36%)=Rs.21535

or
- Rs.24000- 240(TDS)-2966(100%of 12.36%)=Rs.20794

or
- Rs.24000- 240(TDS)=Rs.23760

Please clarify my doubt.

thank q

Annu Agarwal

Annu Agarwal (Expert)
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04 May 2014 As the service provider is not registered ,this means that his turnover is below exemption limit.
75% of service tax shall be paid by you as service receiver under reverse charge.
Amt of service tax comes out to 24000*12.36%*75%=2225
Tds deducted on invoice amount exclusive of service tax =240

The payment shall be made of 24000-240=23760.

2225/- as service tax shall be paid by service receiver directly via challan to goverment.

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