Reverse charge mechanism on security services

This query is : Resolved

ranjit (Querist)
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03 September 2012 Background:
Notification 45/2012 dated 07.08.2012 specifies that service tax liability on security services is to be discharged by the receipient to the extent of 75% w.e.f 07.08.2012.
We have received the bills pertaining to the month of July, 2012 (invoice date 31.07.2012) and have booked the same on different dates in August, 2012 on and from 01.08.2012 till 11.08.2012. However, payment in all cases have been made after 07.08.2012.
Query:
Please confirm whether we as serivce recepients need to discharge service tax libaility to the tune of 75% on these bills pertaining to July, 2012?

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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03 September 2012 You are required to remit service tax at the time of payment since point of taxation in that case will be payment to the service provider. Accordingly, if you make payment in august then you will have to remit ST on or before 07 september

RENGARAJ R.K

RENGARAJ R.K (Expert)
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03 September 2012 Yes, you have to pay the service tax on 75% of the security bills under reverse charge. By the by, whether the security agency has collected tax on 25% of the bill or not?

ranjit

ranjit (Querist)
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03 September 2012 But by the time the invoice was raised there was no such notification.So, isnt it that service tax on the payment made on such bills(whose invoice is raised before 07/08/12)should be discharged entirely by service provider.

ranjit

ranjit (Querist)
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03 September 2012 But the notification was introduced on 07/08/12.So, the bills raised before this should be out of the purview of this notification as by the time the invoice was raised, this notification was not into force.

RENGARAJ R.K

RENGARAJ R.K (Expert)
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03 September 2012 If the service provider himself paid the tax 100%, in my opinion, there will not be any liability for the service receiver. In your query, you have not mentioned the collection of tax 100% by the Service provider.

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