Reverse charge mechanism (rcm)
Vardan Singh Sengar (Accounts Manager in Private Company) (433 Points)
13 July 2013
Vardan Singh Sengar (Accounts Manager in Private Company) (433 Points)
13 July 2013
Vinod Lakhera
(CA in service)
(85 Points)
Replied 13 July 2013
vikas
(student )
(139 Points)
Replied 13 July 2013
Reverse Charge Mechanism in service tax is not a new concept. Under this scheme, service tax is payable by service recipient instead of service provider . Under this charge service receiver have to register himself under service tax . Further service receiver can not claim general exemption limit of 10 Lakh rupees. So he has to pay even on few rupees of service received
It will be very harsh on service receiver end where he has received services falls under reverse charge for only few hundred rupees but due to it he has to register himself in service tax and have to file service tax return on prescribed interval.Moreover under service tax act Nil return is also mandatory and every registered person have to file half yearly return
However, this reverse charge under above mentioned three services will be applicable only if, the service provider of these 3 services is an Individual or HUF or Proprietary or partnership firm or AOP and the service receiver is a Company registered under Companies Act, 1956
1 supply of manpower or security services
2 works contract
3 import of service
4 provided or agreed to be provided by a director of a company to the said company
5 services provided or agreed to be provided by an arbitral tribunal ,individual advocate
6 insurance agent and GTA
7 services provided or agreed to be provided by way of sponsorship
8 services provided or agreed to be provided by way of support service by Government or local authority
Vardan Singh Sengar
(Accounts Manager in Private Company)
(433 Points)
Replied 13 July 2013
Arun Kumar Singh
(GST Advocate)
(15188 Points)
Replied 13 July 2013
Dear Vardan,
Service provider and manufacturer can take the cenvat credit on duty paid under reverse charge system.
Vardan Singh Sengar
(Accounts Manager in Private Company)
(433 Points)
Replied 14 July 2013
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