Reverse charge mechanism for works contract

Hi

Reverse Charge under works contract arises if payment is made by HUF/Individual/Partnership Firm/AoP , whether registered or not, located in the taxable territory to a business entity registered as body corporate, located in the taxable territory;

In your case, payment is made by Body Corporate.

Hence, reverse charge is not applicable and your company is not liable to pay service tax.

[Notification Number 30/2012-ST]

Dear Mr. Gupta, We are pvt Ltd co., it means no need to pay reverse mechanism tax on work contract? Or any labour job done from anybody? Pl advise.

Dear Mr. Gupta, We are pvt Ltd co., it means no need to pay reverse mechanism tax on work contract? Or any labour job done from anybody? Pl advise.

As per service tax rules service tax under RCM is payable for work contract , hiring of motor cab for carry passenger(hirer shouldn't in same business) and supply of manpower if service provider is Individual,HUF,AOP and receiver is Body corporate. As in your case both service provider and receiver are registered co. Then your company need not to pay ST under RCM.

RCM not applicable since service provider is not an Individual/huf/aop/firm. Service tax to be paid by service provider.

Dear sir,

Service provider is invdividual firm in this case how much service tax payble & can we avail this service tax credit

pls guide us

Regards / Ankush