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Reverse charge mechanisam

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Ashok Katarmal

Manager Accounts

65 Points Posted on 03 June 2015

We are partner ship firm (service provider) and Service Receiver is also Partner ship firm...

We have provided machinery to him on monthly rental basis, following are queries..

Q1 - Is there applicable Reverse Charge Mechanisam

Q2 - What % do we charge

Please help.. as We have to raise bill.....

Replies (12)

S.Vix

ARTICLED CLERK

46 Points Posted on 03 June 2015

There is no reverse charge on renting machinery you have to collect the service tax from the service receiver

Ashok Katarmal

Manager Accounts

65 Points Posted on 03 June 2015

OK,

What will be the Rate to be charged.. is it 3.09%

Niraj Kumar Sinha

Sr. Officer SPSIL

469 Points Posted on 03 June 2015

14% from 01/06/2015

rakesh

account

23 Points Posted on 03 June 2015

No reverse charged applicable .

Ashok Katarmal

Manager Accounts

65 Points Posted on 03 June 2015

Thanks for your valuable replies.. Mr. Vix,Nirajji,Rakeshji...

You need to check Two Conditions for reverse charge.... Receiver should Be ......BBC Provider Should Be.......HIPA .. BBC stands for Business Body Corporate... HIPA Stands For H..HUF I...INDIVIDUAL P...PARTNERSHIP FIRM A....AOP ... when both conditions are satisfied...then reverse charge applicable

Ashok Katarmal

Manager Accounts

65 Points Posted on 03 June 2015

Thanks A Lot...Bhattiji,

Now It is very clear.... Great way to remember of RCM ...BBC and HIPA..

Again Thanks..

Puneet Bhatti

Auditor

26 Points Posted on 03 June 2015

Hey I wrote wrong Service Receiver Should be BBC Service provider should be HIPA... sorry for mistake bro...

Puneet Bhatti

Auditor

26 Points Posted on 03 June 2015

oops ....nahi nahi....thik hi likha tha

Ashok Katarmal

Manager Accounts

65 Points Posted on 03 June 2015

No Prob. at All...

CA. Ankit Chandrakar

chandrakar.ankit@gmail.com

1108 Points Posted on 05 June 2015

Reverse Charge is applicable only in case of certian specified services are provided by specified persons, AND RENTING OF MACHINERY DOES NOT FALL IN THAT CATEGORY.

So, no reverse charge will be applicable in your case. The rate to be charged will be 14% for services provided from 01.06.15.

However, if you are billing for the period before 01.06.15, you should charge 12.36%.