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Liability of service receiver under rcm provisions????

Queries 1048 views 5 replies

SUppose i am a service reciever . SErvice provider charged service tax on his invoice ......and i have paid 100 % service tax through that invoice, then do i need to pay 50 % service tax again to govt. under work contract service ??????????

Replies (5)

Yes, the liability of receiver under reverse charge continues to exist despite of the fact you have paid to that party the amount of service tax charged.

Now, you can issue a debit note to the Vendor for the 50% ( your liability) service tax, for recovery of the same.,

Thnx Sumit !!!!!!!!!!!!!

Under Reverse Charge Mechanism, the Liability of Service Receiver is completely different and independent of the liability of the service provider. 

What the service provider has done, is of no relevance. The service provider may not charge any tax in the inovoice (by mistake or when claiming basic SSI exemption of Rs. 10 Lacs) or as in your case, if he charge 100% service tax, the service receiver must lawfully and fully discharge his liability of 50% of service tax.  However, your liability arises only after you make payment to the service provider within 6 months of the date of invoice, otherwise the date of invoice. (Rule 7)

He cann't issue any Debit Note as suggested by Mr. Sumit, as he is paying his own liability and on his own behalf. However, if the provider has charged tax @ 100%, he can lawfully deduct 50% tax from the invoice while making payment as he is liable to pay tax as per actuals and not any additional tax.

Regards,

tax2001-it @ yahoo.com

Dear manoj, I think you dint notice d facts of d case. In d query posted, it is clearly mentioned that the receipent has already paid 100% service tax to vendor... So, issuing a debit note for d same is d way 2 recover for the excess 50% services tax paid to vendor.. Nd on the basis of this debit note(I.e. Credit note for providor), the providor will adjust his excess 50% paid in subsequent liability...

Suppose i am a service reciever, i have issued Debit Note to service provider such guilty service provided by them, then what is treatment about service Tax
 


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