My client rented cabs - the tour operator charged 40% of service tax i.e 4.944%, now my question is if the provider of service choses abatement scheme then does the receiver of service tax need not pay anything or should the receiver needs to pay balance 60% of servie tax i.e 7.41% pls explain
1. If the service provider avails abatement scheme
Liability of service provider-NIL
Liability of service receiver-100% of service tax {40%} charged by service provider
For eg.- value-100, service tax charged by service provider-4.944 so service receiver has to pay only 4.944(100%*4.944) as service tax on reverse charge.
2. If the service provider doesnt avail abatement scheme
Liability of service provider-60% of service tax
Liability of service receiver-40% of service tax
For eg.-value-100, service tax charged by service provider-12.36 so here service provider has to pay 7.416(60%*12.36) directly to govt. & service receiver to pay 4.944(40%*12.36) on reverse charge.
YA ABOVE ANS IS CORRECT
Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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