Partial reverse charge - query


Rajat Agrawal (Article)     07 November 2013

Rajat Agrawal
Article 
 11 likes  218 points

| My Other Post

I'm a service recipient, liable to pay tax on "Manpower Recruitment/Supply agency service" on 75% of the tax value. 

What are the remedies available to me if:

 

(1) If pay the whole 100% amount of tax instead of 75%?

(2) The service provider has paid 100% of the tax instead of 25%?

 

Thanks in advance! :)

avater

satya (Executive Excise)     07 November 2013

satya
Executive Excise 
 111 likes  1834 points

View Profile | My Other Post

Dear Sir,

As per RCM rules, if service provider pays wrongly 100% liability instead of his portion.

The dept will give you notice for non payment of service receipient portion.

The issue will not solve with RO/AC/DC/COMMISSIONER level, you will won by CESTAT or higher authorities.

my suggestion is pl bear your liability as per Reverse charge mechanism .

1 Like
avater

Rajat Agrawal (Article)     07 November 2013

Rajat Agrawal
Article 
 11 likes  218 points

View Profile | My Other Post

Thank you sir.

But will the answer be the same in first case i.e. when I have paid the whole 100% instead of paying 75%? 

avater

CA. Narottam Kumar Rawat (Indirect Tax Consultant)     07 November 2013

CA. Narottam Kumar Rawat
Indirect Tax Consultant 
 31 likes  387 points

View Profile | My Other Post

Dear Rajat,

 

First of all I would like to inform that Service tax under reverse charge on "Supply of Manpower" and not on "recruitments".  

Further, In case you have paid full 100% service tax under reverse charge, you have two options:

1. you may apply for refund of 25% of service tax (excess) paid within a period of one year or;

2. You may adjust for succeeding period liability in accordance with Rule 6(4A) of Service Tax Rules.

CENVAT Credit will be allowed only for 75% not for 25% you have paid in excess subject to eligibility.

In other case, Mr. Sathya has replied you well.

 

1 Like
avater

Rajat Agrawal (Article)     08 November 2013

Rajat Agrawal
Article 
 11 likes  218 points

View Profile | My Other Post

Dear Narottam

 

If I adjust the excess 25% of excess tax paid later for my next liability, will I be able to use CENVAT for that 25%?

avater

CA. Narottam Kumar Rawat (Indirect Tax Consultant)     08 November 2013

CA. Narottam Kumar Rawat
Indirect Tax Consultant 
 31 likes  387 points

View Profile | My Other Post

Of course you are eligible to take CENVAT Credit. But proper reconciliation make ready for such adjustment, so that in future you can prove the same.  

1 Like

prosanta bordoloi (AAO)     09 November 2013

prosanta bordoloi
AAO 
 83 points

View Profile | My Other Post

Whether Reverse charge is applicable for the service receiver in the following case 

(1)The service provider is a Govt PSU or a Private Limited Company and offering works contract service to a Govt PSU (SERVICE RECEIVER). Now whether the reverse charge is applicable for the service receiver ?

Thanks in advance 

 

avater

CA. Narottam Kumar Rawat (Indirect Tax Consultant)     09 November 2013

CA. Narottam Kumar Rawat
Indirect Tax Consultant 
 31 likes  387 points

View Profile | My Other Post

Dear Prosanta,

PSU are not Govt or local Authorities. In case PSU receives services which fall under Reverse Charge then PSU is liable to pay service tax under Reverse Charge.

However, they paid through account entry only.

 

prosanta bordoloi (AAO)     16 November 2013

prosanta bordoloi
AAO 
 83 points

View Profile | My Other Post

My question is this -whether   reverse Charge is applicable if  both the service provider and the service receiver is company ?

avater

CA. Narottam Kumar Rawat (Indirect Tax Consultant)     16 November 2013

CA. Narottam Kumar Rawat
Indirect Tax Consultant 
 31 likes  387 points

View Profile | My Other Post

Dear Prosanta,

Yes in some cases even both service provider and recipient are company reverse charge is applicable:

1. Import of Services

2. GTA

3. Sponsorship Services

However, in case of Manpower Supply , rent a cab etc.. only in case provider is non-corporate and recipient is a Corporate.

 


Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register  




Popular Discussion


view more »