100% or 75% of tax liability on service receiver

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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,

Replies (1)
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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