This is regarding the reverse charge mechanism of service tax.The Service Tax notification no.30/2012 of reverse charge mechanism came into effect from 1-7-2012.Our contract is dated 9-7-2012.
As per reverse charge mechanism of service tax,for Work's Contract Service provided by a partnership firm,50% of service tax is payable by service provider and the remaining 50% is payable by service receiver.
Our client(service receiver) has been deducting their liability of 50% service tax from our payments as service tax recoveries.Is the treatment adopted by them valid?why should they deduct their liability from our payments?
CAclubindia
