Reverse charges
Querist : Anonymous
CAN ANY PROVIDE ME A SAMPLE INVOICE IN CASE OF REVERSE CHARGE
Pl refer follo link:
https://www.taxmanagementindia.com/visitor/detail_article.asp?ArticleID=1765
You will get detailed idea.
Rgds//Vaibhav
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Querist : Anonymous
1. Does the service provider show service tax in the invoice under RCM?
Answer:
No, the service provider generally does NOT charge or show service tax in the invoice under RCM.
The service provider raises an invoice only for the service amount (i.e., the value of services provided).
The service recipient is liable to pay the service tax directly to the government under reverse charge.
2. Why does the service provider not charge service tax?
Because the tax liability is shifted to the service receiver under RCM, the provider is not required to collect service tax from the receiver.
3. Sample invoice format under Reverse Charge Mechanism
Here is a sample of how the invoice should look:
Invoice
Particulars Amount (₹)
Description of Service Manpower supply
Service Value 100,000
Service Tax (to be paid by receiver under RCM) NIL (Not charged by provider)
Total Amount Payable 100,000
Note on Invoice:
The service provider should mention on the invoice that the service tax is payable by the service recipient under Reverse Charge Mechanism as per relevant notification/rule.
For example, the invoice may have a note:
“Service tax is payable by the recipient under Reverse Charge Mechanism as per Notification No. XX/XXXX”
4. What does the service receiver do?
The service receiver calculates the service tax payable on the value of services received.
The receiver pays the tax directly to the government.
The receiver can take credit of this tax (if eligible).
Summary:
Who Pays Service Tax? Invoice Tax Shown By Service Provider? Notes
Service Receiver (RCM) No Service provider invoices service value only, tax paid by recipient
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