Service tax payment u/r reverse charge meachanism

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This query is : Resolved

vinay (Querist)

22 March 2013 sir,
1-From 01-07-2012, under reverse charge mechanism on manpower recuitment agnecy ,we are liable to pay 75 % service tax of total tax, but one agency charge 100 % service tax amount in their bill instead of 25 % service tax amount is to be charged , in such instance shall we have to pay 100 % service tax amount to agency , will this exempts our liability to pay 75% Service Tax under RCM . or shall we pay only 25 % service Tax though they charge 100 % pl.clarify

2- From 01-07-2012 under reverse charge mechanism on labour contract we are also liable to pat 75 % service Tax of total service Tax, but our A/c Dept.paid Labour contractors bills up to Dec-2012 along with 100 % service Tax amount which charged in all those bills Now can we avail 100% Service Tax credit which we paid directly to contractor. still, is there any liability to pay 75 % Service Tax under RCM . pl.confirm best possible option to get rid of this issue.

regds
Vinay KArnik
Ahmedabad

Sumit Grover

Sumit Grover (Expert)

22 March 2013 In query No. 1, you shall still be liable to pay your portion(i.e.75% of service tax liability) under reverse charge mechanism..So, it is advisable to issue a debit note to the Vendor & pay him only 25% of liability.

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