Please help me.

Dear all.

Good Afternoon.

Please confirm me In case of work contrect Service receiver is liable to pay Service Tax with effect from 01.04.2012 as per notification no 15 dated 17.03.2012 of the Service Tax Act.

If yes, then please confirm me:-

I am working in a export house, In which all most works are perfermed by small contractors. they are even not known about service Tax. 

In this case whether our company is liable to pay service Tax as per above notification.

 

Waiting for your valuable reply

TRILOCHAN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Replies (6)

Dear Trilochan,

In the notification even service provider is made liable for service tax. There is a general exemption for service providers that they are not liable to pay service tax if the turnover does not exceeds 10 lakhs in the previous year. If the service provider is not liable to collect and pay service tax, then service receipent is also not liable to pay service tax in reverse charge (as here even service provider is included in percentage). When 50% of service provider is not liable to pay service tax then 50% of service tax payable by service receipent cannot be charged.  As there is no clarification on this from CBEC, i took this stand.

Thanks a lot Saikiran Sahab, 

Sir one thing i want to confirm from you,  if the  service recipiant is a company, Then only REVERSE CHARGE Section Section 68(2)  applicable. Otherwise no liablility for service receipiant.

Please confirm me whether i am right?

Dear Trilochan,

I am unable to understand your question exactly...

Dear Trilochan,

I might have interpreted in a different way to the changes in reverse mechanism. So do not consider my reply to your query as the final one.

I have informed that on reverse mechanism 10 lakhs basic exemption limit will not apply. Please excuse me for my reply.

In case say that the SP is eligible for benefit of threshold exemption of Rs 10 Lacs then whether the SR is still liable to pay his share of taxes or will he also be not liable to pay any taxes. If the SP is claiming exemption for threshold benefit, fundamentally the service tax is exempt. Reverse charge should be seen as just a collecting mechanism of service tax and not the levying event. In this case SR shall not be liable to pay any taxes and invoice issued by the service provider shall be free from any service tax aspect.

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