100% or 75% of tax liability on service receiver

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CA in service & CS. dipmaj@
2886 Points Posted on 12 July 2012

Friends

The service provider providing manpower supply service to us (a pvt company) has billed INR 10,000. He has not charged any service tax. 12.36% thereof comes to 1236.

Now, we as receiver of service, under recently introduced reverse charge mechanism, need to pay output tax @ 100% of 1236 or 75% of 1236.

Can this be paid by way of utilisation of cenvat credit.

Please guide.

Regards,

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On 12 July 2012 at 08:43 Report
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Taxation Manager
797 Points Posted on 12 July 2012
If the service provider is a pvt ltd company then you are not liable to pay service tax on the said service. Only if the provider is not a limited company then you are liable to pay tax @ 12.36 on @ 75% of the bill value. Also you cannot adjust your liability under reverse charge against Cenvat Credit. Hope your query is resolved now.
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On 12 July 2012 at 08:52

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