Works contracts services
This query is : Resolved
CA Sanjay Baheti
(Querist)
02 January 2014
One of My client being a Pvt Ltd Co registered under Service tax for Works Contracts Services.
If It is providing the said services to a Pvt Ltd Co/Public Ltd Co. then whether Partial Reverse Charge Mechanism will be applicable to my client i.e.after availing benefit of Abatement as specified under Service tax notification No. 26 of June,2012 & 50% liability will be both for Service Provider & Service Receiver as per Notification 30 of June,2012. Or My client will be liable to borne 100% ST Liability.
Please reply at earliest.
If It is providing the said services to a Pvt Ltd Co/Public Ltd Co. then whether Partial Reverse Charge Mechanism will be applicable to my client i.e.after availing benefit of Abatement as specified under Service tax notification No. 26 of June,2012 & 50% liability will be both for Service Provider & Service Receiver as per Notification 30 of June,2012. Or My client will be liable to borne 100% ST Liability.
Please reply at earliest.
CA.Chandankumar
(Expert)
02 January 2014
Your client will be liable for the entire service tax liability.
To avail the benefit of notification, Service Provider must fulfilled the definition stated in the notification.SP is defined in the following manner :
Where service is provided or agreed to be provided by
1) Any individual or
2) HUF or
3) Proprietary Firm or
4) Partnership Firm whether registered or not or
5) including Association
to
1) any company registered under Cos Act, 1956 or
2) any business entity registered as body corporate ( Including LLP).
Since your Client does not comes under the definition of partial reverse charge mechanism, hence your client will be liable for the 100% service Tax.
To avail the benefit of notification, Service Provider must fulfilled the definition stated in the notification.SP is defined in the following manner :
Where service is provided or agreed to be provided by
1) Any individual or
2) HUF or
3) Proprietary Firm or
4) Partnership Firm whether registered or not or
5) including Association
to
1) any company registered under Cos Act, 1956 or
2) any business entity registered as body corporate ( Including LLP).
Since your Client does not comes under the definition of partial reverse charge mechanism, hence your client will be liable for the 100% service Tax.
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