Reverse charge provisions in service tax

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 July 2013 Dear Sir(s),
I worked for Resident Welfare Association (RWA). One of RWA vender is (Individual)providing man power services and he billed to RWA. But in bill service tax charges by him 3.09% rather than 12.36%. is this correct?
Please let me guide as soon as possible.

Thanks & Regards
Akhtar

Ganeshbabu K

Ganeshbabu K (Expert)

12 July 2013 1)Service tax is payable under reverse charge only if service receiver is Business entity registered as Business Entity..which is Company and LLP..

So you are not under any obligation to pay balance 75% to government..So

1)Just pay what he claimed in invoice

2)You don't need to pay balance service tax to government as reverse charge not applicable to you.

Thanks & regards
Ganesh babu k

Arun Gulati

Arun Gulati (Expert)

12 July 2013 In my view, he ought to charge 12.36% as service tax inasmuch as reverse charge is applicable when an individual is providing services to a business entity registered as body corporate, located in the taxable territory and in your case, you are not a body corporate, therefore, no RCM is applicable and full tax shall be collected by vendor. however, if vendor is not collecting, no action can be taken by the Department against your RWA as under law, he bound to collect and pay to government. I agree with Ganeshbabu view.

Querist : Anonymous

Querist : Anonymous (Querist)

13 July 2013 Thanks Sir

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