Reverse charge of service tax

Save Share

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 October 2012 In case of reverse charge where the service reciever shall pay service tax. Is the service tax to be calculated on gross amount+TDS or only on the gross amount where the TDS is also borne by the service reciever??
Eg. Rs. 10,000 gross amount
Rs. 2500 TDS
Will service tax be calculated on 12500 or only 10,000???

neeraj

neeraj (Expert)
Follow

12 October 2012 ques is not clear how TDS is added in bill ???????
If bill amt is 10000+2500=12500 then ST liability is on 12500

vishwanatham gandla

vishwanatham gandla (Expert)
Follow

18 October 2012 The rule is that to effect TDS, it is the Gross Amount Charged on which tds rate to be applied. In the RCM case, the service provider is not entitled to charge ST( to the extent specified in rules), hence the ST to be paid by Service Recipient does not form part of Gross Amount charged by Service Provider and therefore, you are not required to consider TDS on ST amount.
In other words, deduct tax at source at the rate specified only the Billed Amount( which does not contain ST here)
Hope the matter is clear.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join CAclubindia WhatsApp Finance Community & stay updated with the latest TAX news, compliance alerts and important updates all in one place!