When does service tax become applicable

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Querist : Anonymous

Querist : Anonymous (Querist)

15 November 2013 Hi,

I have a proprietorship firm handling recruitments. I wanted to know when does service tax become applicable. My last years turnover was 2L and this year has reached 8L. Do I have to charge service tax now or will it become applicable when I cross 10L this year. kindly advice

Nikhil Kaushik

Nikhil Kaushik (Expert)

15 November 2013 it will become applicable when you touch 10 lakhs this year.

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Querist : Anonymous

Querist : Anonymous (Querist)

15 November 2013 Thank you. Have one more query, As a proprietory ship firm what is the applicable rate of service tax to be charged? Do I charge full 12% or will part of it paid by the client directly.

Nikhil Kaushik

Nikhil Kaushik (Expert)

15 November 2013 that shall depend on whether services provided by you are covered under reverse charge mechanism or not.

Querist : Anonymous

Querist : Anonymous (Querist)

15 November 2013 can you please elaborate on this point

Nikhil Kaushik

Nikhil Kaushik (Expert)

15 November 2013 normally, service tax is to be paid by the service provider at full 12%

However, certain service providers are covered under service tax mechanism in which the service receiver pays the service tax.

for details, please refer https://www.caclubindia.com/articles/reverse-charge-mechanism-in-service-tax-an-overview-15865.asp#.UoYWEieKK9g

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