Reverse charge implication

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Virendra Gupta

CMA

135 Points Posted on 27 March 2014

The small service provider hiring his vehicles to the company and quoting the invoice without charging service tax portion.In this case company liable to pay service tax under RCM but this additional portion of tax company should be from their own pocket or by deducting the portion from invoice of SSP. Plz give ur advice and some notification regarding this matter.

Replies (8)

Manoj Mehta

Head Of Department (Accounts & Finance)

1272 Points Posted on 27 March 2014

Dear sir, company have to pay it from his own pocket. Say if amount charged is 100 then company have to pay thier part of service tax (100*12.36%*40%). Regards

Virendra Gupta

CMA

135 Points Posted on 27 March 2014

Dear sir, Thanks a lot for advice.can u plz share any notification regarding this.

Arun Kumar Singh

GST Advocate

13166 Points Posted on 27 March 2014

Service provider is covered under SSI exemption then no need to charge service tax only recipient will pay the service tax on his own part under notification no. 30/2012-ST and after the payment of service tax they can avail the cenvat credit.

Raj Jha

Company Secretary

26 Points Posted on 27 March 2014

You may refer to notification no. 30/2012 effective from 1st July, 2012.

Virendra Gupta

CMA

135 Points Posted on 27 March 2014

Thanks a lot Arun and Raj sir. Can u plz clarify one more doubt. Can company make a agreement with SSP(not RCM case)as value of contract including all tax and at the time of payment company simply deducting ST portion from invoice and that portion not paying to the govt and not taking the credit. Has this practice right as per finance act,1994.

Akshay Garg

Indirect tax trainee

247 Points Posted on 28 March 2014

Dear Virendra

. You are not supposed to pay Service tax also the service recipient cannot deduct any amount from invoice value as the liabilty under reverse charge is casted upon the service recipient and not the provider.Please refer notifiacation 30/2012 for reverse charge applicabilty and Sec 68(2) of the finance act 1994.