St on works contract

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This query is : Resolved

K.Sathiesh (Querist)

27 December 2013 One of my client is manufacturing Cycle & it's related accessories, and he had given some works contract for intermediate inputs which were used in the manufacturing of final product, but the service provider is not charged any ST on works contract.

My Doubt is whether this transaction fall under ST-Reverse Charge purview, if yes how i can account this transaction and what's the percentage of ST payable by our client.

CA Sourabh Agarwal

CA Sourabh Agarwal (Expert)

27 December 2013 It would not fall under RCM. Advise service provider to charge service tax. It is not your liability anyways.

K.Sathiesh

K.Sathiesh (Querist)

27 December 2013 Thanks for your reply sir,

That Service Provider is a Company but it was not registered under ST.

If the service provider Chargers ST in invoice( In-case of RCM services as per Notification 30/2012 ) then only we need to pay ST as a service receiver otherwise there is no liability on service receiver to pay Service tax on RCM.

Is it valid or not in view of Service receiver.

CA Sourabh Agarwal

CA Sourabh Agarwal (Expert)

27 December 2013 If Service provider is amongst Individual, HUF, Firm, AOP and receiver is Company, then only RCM would apply in case of Works Contract.

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