Sarthak Gupta (Student) (12 Points)
18 February 2017What if service provider wrongly discharged full amount of service tax liability in case of service covered under reverse charge. Is there any liability of service receiver in case service provider wrongly paid service tax on the service under reverse charge? Please provide some clarification.
CA Hariprasad Nayak
(Chartered Accountant)
(221 Points)
Replied 18 February 2017
First, you may request the vendor to revise his invoice to collect taxes at the appropriate rates (i.e 50% in this case.).
For any reason, if this is not happening, you- being a service receiver, have no obligation to pay taxes under the RCM mechanism as the vendor has already collected and remitted the full amount of taxes. You should not face problem as long as you can prove to the tax authorities that the Govt has received its tax dues in full.
However, issues may crop up if the vendor has collected the taxes from you but not remitted the taxes. Therefore, it is advisable that you obtain a certificate from the vendor that he has remitted the whole amount of taxes.
This is my personal view. Views of other members solicited.
regards,
CA Hariprasad Nayak
+91 9481227467
CAclubindia
