Hello friends., can anyone tell me, what is the basic difference between old service tax and current one..
I want this difference in regards to REVERSE CHARGE MECHANISM..
Being a student, i understand that service tax is always paid by service reciever. For e.g., if i am going for coaching classes, that person will charge from me service tax alongwith his tution fees. So, that means, earlier too, it was service reciever, who used to pay service tax. Service provider used to just pay that tax amount to government, i.e., a mode of payment for the service reciever for tax amount.
So, what does SERVICE CHARGE MECHANISM means? What change does it bring, as the language of notification says, "Under Reverse Charge Mechanism the service recipient is liable to pay the service tax instead of service provider"..
As such, it was service recipient paying the service tax earlier too.. Is it that, now service recipient has to pay this amount directly to government and not the service provider?
CAclubindia
