Reverse charge mechanism vis-a-vis negative list

Reverse mechanism cannot override negative list.

In respect of works contracts, if service privider is individual or firm and receiver is company, reverse mechanism applies. The provider can collect his share of tax from the receiver. 

Hi Sanjay,

1. Reverse charge mechanism have to read in consonence with negative list.

Items contained in negative list are totally exempted frm service tax hence the samewould not be chargeable under reverse chage mechanism also. Reverse charge mechanism inserted with the view to shifting reposnibility for service tax payment and to increase government revenue. Reverse charge mechanism will never oveerride negative list services.

2. It depends upon service provider. If service provider enjoying SSI eemption i.e. if he is within exemption limit which doesnt not required to registered with service tax or pay service tax, then he would not charge service tax. If doesnt, then he will have to charge his part of service tax as per notification. If service provider charging service tax, must have to see whether he is registered with service tax authorities.

Thanks and Regards,

Manoj B. Gavali