Service tax on partial reverse charge mechanism

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Querist : Anonymous

Querist : Anonymous (Querist)

02 January 2014 Is service tax will be applicable on a proprietorship firm being a service provider liable to pay service tax on RCM but turnover is less than Rs 10 lacs.
Is it cover under threshold exemption?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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02 January 2014 yes. he will be liable to pay service tax. SSI exemption is not available to service receiver in RCM.

Querist : Anonymous

Querist : Anonymous (Querist)

02 January 2014 thank you so much for your response, but he is a service provider not receiver. In that case what will be his liability??

Nikhil Kaushik

Nikhil Kaushik (Expert)
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02 January 2014 ok. let me clarify. If you are providing a service wherein you are required to pay service tax under RCM (which would be the case under partial RCM for cases like manpower supply, works contracts etc), then you dont have to pay if turnover is less than Rs 10 lakhs.

However, the service recipient still have to pay his/her share of the service tax under partial RCM irrespective of whether he is liable to pay service tax under normal service tax provisions.

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