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Reverse charge of service

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Raushan kumar ray

Article assistent

43 Points Posted on 18 July 2013

Dear All,

I have a question open to all.

I am an Individual working with a Company as contract employee getting salary of Rs 100,000 (+) per months, We have contract for service and i am paying TDS on profession also @ 10%,

Q 1.

Whether i have covered under " Supply of Manpower" and the company is lible to pay the S.T. under Reverse charge mechanism on 75% of Professional Charges which they are paying to me...??

Q 2

As i am getting More than 10 L in a year as professional charges, I should get register under service provider and should pay S.T. on 25 % of my salary...??

Please guide me as soon as possible with related notifications and guidelines if any.

Replies (1)

Dipjyoti Majumdar

CA in service & CS. dipmaj@

2879 Points Posted on 20 July 2013

Your using the word 'salary' is not correct. You are getting contractual fees for rendering professional services. Prima facie in this case reverse charge mechanism is not applicable as nature of service is not man power service.

But yes as your fees exceed 10 L in a year you should charge service tax @ 12.36% and pay to Government after taking registration and with a ST number.

Thanks,