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Reverse charge mechanism of service tax

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Siddharth Nanda

Manager Accounts

41 Points Posted on 24 August 2012

Dear Friends,

Can you please clarify about the followings?

1. Wheather Reverse Charge Mechanism of service tax, requires service providor to be registered? In other words if the service providor is not having a service tax registration number then the liability of service receiver does not arise.

2.Wheather service receivor will still have the liability even though the service providor is not charging service tax in its bill say for example for in case of indivudual advocate where shareing ratio is 6:4 & in case of WCT where sharing ratio is 1:1?

3. What are the penalties & fines for not following the pescribed rules of "Reverse charge Mechanism of Service Tax" by the Service receiver?

Regards

Replies (1)

Mallikharjun

Deputy Manager

354 Points Posted on 24 August 2012

Registration is not required for service provider if he is below threshold limit i.e., 10 lakhs. But service receiver's service tax liability is fixed to the extent prescribed in the notification. That means, whether service provider registered with service tax department or not, whether he is charging service tax in his invoice or not, does not matter to the service receiver. Service receiver has to pay his liability to the government.