Reverse mechanism of service tax
This query is : Resolved
11 October 2012
I will be highly obliged if you can kindly clarify my following confusion.
" WE ARE INTO HOSPITALITY INDUSTRY, SOME OF THE VENDORS/CONTRACTORS,
ENGAZED BY US ARE NOT REGISTER UNDER SERVICE TAX SO THEIR BILL DO NOT
CHARGE US WITH SERVICE TAX. BUT AS SERVICE RECIVER WE ARE LIABLE TO
DEPOSIT SERVICE TAX UNDER REVERSE MECHANISM UNDER WCT CONTRACT & MAN
POWER CONTRACT.
OUR CONFUSION IS WHEATHER:
1. WE CAN TAKE CREDIT OF SUCH SERVICE TAX DEPOSITED BY US AS CENVAT CREDIT?
OR
2. WE CAN DEDUCT OUR SERVICE TAX PORTION FROM THE VENDOR BILL &
DEPOSIT THE SAME TO THE GOVERNMENT ACCOUNT JUST LIKE THE PROVISIONS OF
TDS.
Regards
" WE ARE INTO HOSPITALITY INDUSTRY, SOME OF THE VENDORS/CONTRACTORS,
ENGAZED BY US ARE NOT REGISTER UNDER SERVICE TAX SO THEIR BILL DO NOT
CHARGE US WITH SERVICE TAX. BUT AS SERVICE RECIVER WE ARE LIABLE TO
DEPOSIT SERVICE TAX UNDER REVERSE MECHANISM UNDER WCT CONTRACT & MAN
POWER CONTRACT.
OUR CONFUSION IS WHEATHER:
1. WE CAN TAKE CREDIT OF SUCH SERVICE TAX DEPOSITED BY US AS CENVAT CREDIT?
OR
2. WE CAN DEDUCT OUR SERVICE TAX PORTION FROM THE VENDOR BILL &
DEPOSIT THE SAME TO THE GOVERNMENT ACCOUNT JUST LIKE THE PROVISIONS OF
TDS.
Regards
11 October 2012
under reverse charge service receiver is liable to pay service tax even if service receiver not charging service tax on invoices.
in your case you are liable to pay service tax and also eligiable to take cenvat credit of the same.
in your case you are liable to pay service tax and also eligiable to take cenvat credit of the same.
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