Reverse charge mechanism

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pradeep (Querist)

26 November 2014 dear sir, we are service receiver and service provider both my question is this I have make a invoice of taxable value rs 50000+ tax 6180= 56180 output service tax 6180 and I have received service from manpower supplier taxable value is rs 40000 + tax 4944= 44944 then input 4944 with RCM rule how much service tax will I pay to government please guide me with example and entry.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

26 November 2014 Presently you have to pay both service tax now such as Rs.6180 and Rs.4944.

Because service tax on reverse charge basis need to pay by cash first then only you can utilise the same credit against the output put service.

CA Parul Saxena

CA Parul Saxena (Expert)

27 November 2014 Pay fully Rs.4944 to the department this is your input service tax.
Then at the time of payment of Rs.6180 avail credit of Rs.4944 and pay the balance tax i.e.6180-4944=1236

Rupesh Jain

Rupesh Jain (Expert)

27 November 2014 under RCM you have to pay the bill amount to the contractor after payment you can use the credit of service tax.

CA JITESH KHANDELWAL

CA JITESH KHANDELWAL (Expert)

28 November 2014 CA Parul Saxena, please clarify on your view, because as far I think we have to pay Service Tax on RCM on manpower Supply, then how can we take input credit of the same against other output service tax payable.
I hv to pay 6180+4944 ?
Please correct if I'm wrong

Rupesh Jain

Rupesh Jain (Expert)

29 November 2014 r/sir
pls take the input on services tax paid under RCM , if you are using this for production activity if you are using housekeeping then no input will available.

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