Service tax

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This query is : Resolved

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A security business owner is seeking advice after realising they failed to charge service tax to customers during the 2016-17 financial year, before GST implementation. Despite approaching customers for the outstanding tax, they've received a poor response. The discussion touches upon the Reverse Charge Mechanism (RCM) where the service receiver is liable to pay service tax, but the business has received a show-cause notice and late fines from the GST department. They are now asking about the consequences of non-payment and who is responsible for the late fines.

Yug kumar

Yug kumar (Querist)

11 March 2021 My neighbour runs a security business but during the financial year 16-17 before implementation of gst they were liable to charge the service tax from their customer but unfortunately they did not had any idea regarding charging the service tax.. but now when they came to know they have forgotten to charge service tax, they have approach those customer for payment of service tax but their customer are not giving a good response.
In this case what is the best we can do it???

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

12 March 2021 For security services RCM applicable during service tax. Only service receiver has to pay service tax.

Yug kumar

Yug kumar (Querist)

12 March 2021 Thank you sir for your kind reply... But we have have forgotten to charge the tax form customer and now we have received a letter from gst office regarding same for not payment of services tax... We have told our customers but they are not making us payment so that we can transfer the payment in gst... Sir what shall be the consiquences if we don't make payment unless we recieve payment from our customers... And wat about the late fine which has been inccur who shall bear it because it's was our responsibility to collect tax from customer

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

12 March 2021 Service reciver has to pay service tax under reverse charge see the link.
https://www.google.com/url?sa=t&source=web&rct=j&url=https://taxguru.in/service-tax/impact-service-tax-manpower-supply-security-services.html%3Famp&ved=2ahUKEwjVhoLvhKrvAhW0xTgGHW7UA_8QFjABegQIAxAL&usg=AOvVaw1lSMmK-iNxT11WmLSf-dil&cf=1

Yug kumar

Yug kumar (Querist)

12 March 2021 Sir in that case why gst dept send us the showcase letter if its RCM..
Now we have already charged with late fines so in this case who will pay the late fines and wat if we file petition for reducing late fine??? Kindly suggest me sir

Yug kumar

Yug kumar (Querist)