A Pvt Ltd company is providing finishing service such as Structural Glazing, ACP Cladding etc in respect of Commercial Complex and is registered under works contract service. The Company Purchases the Material and sends it to verious Sites. The Company is availing Service of Individual Labour Contractors for the above work. W.E.F. 01-07-2012, in case of labour payments, Reverse Charge Mechanism was introduced in service Tax in which 50% of Service tax is to be paid by service receiver (i.e. Co.) and remaining 50% service tax is to be paid by service provider (i.e. Labour Contractor).
My question is 1. Whether the company is covered under reverse charge mechanism ? If Yes, What is registration requirement for both service provider and service receiver? Suppose, the company wants to pay Rs. 1,00,000- to a labour contractor, what amount should be paid to contractor and what amount should be paid as service tax ? can Company claim credit of whole service tax paid ?
2. If any Labour Contractors gross receipts are more than Rs. 10 lakhs, will reverse charge apply? please cite relevant notifications or case law in support of your answer?
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