Service tax reverse charge mechanism

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This query is : Resolved

Prakash (Querist)

04 December 2012 A manpower supply service provider is not liable to be registered as his turnover is less than 9 Lakhs PA and provided service to a corporate and has submitted the invoice for an amount of INR 10000 without service tax. In that case the service receiver is liable to pay service tax of INR 927(10000*12.36%*75%) to Government. The questions are :
• On whose account this amount is to be deposited(Service Receiver(SR)/Service Provider(SP)
• If paid on account of SP, is SP suppose to get registered to claim the refund of Service Tax so paid and SR can pay only balance amount (10000-927) to SP
• If paid on account of SR, can SR claim the input credit of INR 927 and pay total INR 10000 to SP

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)

04 December 2012 1. The service recipient has to get himself registered and obtain a registration number.
The service tax will be deposited against the registration number of the service recipient.

2. Service recipient will pay Rs. 10,000 to the service provider, Rs. 927 as service tax and claim CENVAT credit of the same.

Prakash

Prakash (Querist)

04 December 2012 Thank you very mcuh Sidharth. In that case is it possible to use already accumulated CENVAT credit for payment of INR 927 by the Service Recipient

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