Reverse charge mechanism

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This query is : Resolved

ROHIT SINGH (Querist)

12 June 2012 Hi,

I have an doubt if the person cover under Reverse Charge Mechanism, he has the libality to pay 70% service tax by own and the rest is paid by service reciver, however the person who pay 70% service they charged the 100% service tax i.e. 70%+30%, so in that case the service reciver is liable to pay service tax to Government or Not.

Regards,

Rohit Singh

NILESHKUMAR

NILESHKUMAR (Expert)

13 June 2012 there sould not be any problem to the receipient as the service tax has been collected by the provider of service and paid tpo the govt. og india.

Only important thing is the invoice prepared by service provide should reflect that the 30% tax is collected from the receipient and will be deposited into govt. account and it is suggested to enter a agreement between the service provider and receiver for mutual agreement for collecting the service tax from receipient and depositing the same with service tax dept. this may be helpful in case of any future litigation or the service provider becomes defaulter and does not pay the amount collected from the receipient

ROHIT SINGH

ROHIT SINGH (Querist)

13 June 2012 Hi,

First of all thank u so much...to give me the reply...bt my question is not that...

I want know if the service provider is charged full amount of service tax on the invoice bt he will cover under Reverse Charge Machneim, so in that case the person who recieved the service he liable to pay service tax to Goverment or not.

Regards,

Rohit Singh

ROHIT SINGH

ROHIT SINGH (Querist)