Tax
This query is : Resolved
poonam singh
(Querist)
08 June 2013
what is reverse tax mechanism
Ganeshbabu K
(Expert)
08 June 2013
1)Normally, service tax is payable by person providing the service.
2)Section 68(2) makes provision for reverse charge i.e. making person receiving the service liable to pay tax.
3)Provision can be made that part of tax will be paid by service receiver and part by service provider.
4)Provisions relating to reverse charge are contained in Notification No. 30/2012-ST dated 20-6-2012.
2)Section 68(2) makes provision for reverse charge i.e. making person receiving the service liable to pay tax.
3)Provision can be made that part of tax will be paid by service receiver and part by service provider.
4)Provisions relating to reverse charge are contained in Notification No. 30/2012-ST dated 20-6-2012.
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CMA Ramesh Krishnan
(Expert)
08 June 2013
Small correction in expert reply.
Service tax need to pay ultimately by service receiver only in any case, not service provider. but service provider is acting as agent to collect the service tax from service receiver and pay to government it is called direct mechanism in any indirect taxation aspects
but in case of reverse charge mechanism, the agent work of service provider is not there. service receiver directly paying the service tax to the government fully or partially for the service availed by them
Service tax need to pay ultimately by service receiver only in any case, not service provider. but service provider is acting as agent to collect the service tax from service receiver and pay to government it is called direct mechanism in any indirect taxation aspects
but in case of reverse charge mechanism, the agent work of service provider is not there. service receiver directly paying the service tax to the government fully or partially for the service availed by them
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Ganeshbabu K
(Expert)
08 June 2013
@cma ramakrishnan
yes you are correct sir..
i have replied to him in a view of "liablity to pay department",
thank you for clarifying the concept to author
yes you are correct sir..
i have replied to him in a view of "liablity to pay department",
thank you for clarifying the concept to author
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