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Reverse charge service tax

Sachin Rajput (account exe) (593 Points)

12 September 2013

Dear all,

We are Manpower Service Receiver under reverse charges ST.

If our service provider (Manpower Agency ) is not registered under service tax and issue invoice without service tax.

In this case are we liable to pay service tax under reverse charge ???

Please help me.

Thanks to all

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10 Replies

sanjay singhal (CA) (987 Points)
Replied 12 September 2013

Yes you have to pay service tax. See reply posted on given below link.

/forum/reverse-charge-mechanism-applicabilty-264688.asp#.UjFrG9J0wjw

Sachin Rajput (account exe) (593 Points)
Replied 12 September 2013

thanks for reply,, But we didn't get register under reverse charge..

what is the consequences in that case..

Gautam Joshi (Partner) (361 Points)
Replied 12 September 2013

Dear Sachin,

Service Tax law starts from registration.

First of all please note reverse charge of manpower supply service will be applicable to you if you are a company or corporate, not otherwise.

Follow following steps:

1. Amend registration and include Manpower supply service as a service receiver.

2. Pay tax under manpower supply service @ 12.36% on 75% of value.

3. File return for the period including this service and tax shown as partial reverse charge.

Best Wishes.

Ganeshbabu K (Audit and Tax Advisory) (48564 Points)
Replied 13 September 2013

You mandatorily should ammend your service tax registration if already available,,and should take registration if not available before

1 Like

Manoj Agarwal (Service Tax Consultant Rourkela Service) (3456 Points)
Replied 13 September 2013

In case of Supply of Manpower Service, reverse charge is applicable w.e.f 01-07-2012 vide NN-30/2012.

If the Supply of Manpower service is provided by an individual/proprietary firm, partnership firm, HUF or AOP AND the service recipient is a business entity registered as BODY CORPORATE, only then joint reverse charge is applicable.

In case of joint reverse charge, as in manpower supply (25:75), the liability of service provider and service recipient is independent of each other. Even if the service provider is claiming basic exemption of Rs. 10 Lacs vide NN-33/2012, the service recipient must get itself registered and pay tax on 75% value, as the basic exemption is not available to the service recipient.

Also note the due date for payment:

So, assuming that the Manpower Supply service recipient is a body corporate and the provider is not a company, then the point of taxation shall be the date of payment to the service provider (Rule 7 of POT Rules, 2012). However, if the payment is not made with 6 months from the date of invoice, then the

point of taxation shall be the date of invoice (if invoice issued with 30 days of completion of service) otherwise the date of completion of service.

The due date for payment of tax to the CG shall be 6th of the following month where point of taxation occurs in case of e-payment.

Y.Srinivasarao (Job) (34 Points)
Replied 17 September 2013

in case the manpower supply agency charged 100% service tax then what about the service receiver stand, whether it may be acceptable procedure for both the provider and receiver i.e provider charged 100% tax and receiver not paying any thing if both parties are corporate entities.

Puneet Jain (Dy Manager) (40 Points)
Replied 18 September 2013

RCM doesn't apply on service reciever if service provider is a body corporate. so service provide will charge full service tax on it bill. You pay to him & relax. It's his liability to deposit to Govt.

TARUN (STUDENT) (28 Points)
Replied 10 May 2014

What are the implications of reverse charge mechanism if 100% service tax charged by service provider (other than company) ??

Asif Ali (Senior Audit Manager) (227 Points)
Replied 16 February 2015

What is the due date for payment of Service tax under RCM for Prop. firm ? is it quarterly payment or monthly

Dharmesh (C.A.) (47 Points)
Replied 17 February 2015

Asif

Due date of payment under reverse charge for proprietor shall be the same as provided in rule 6 of service tax rules 1994 i.e. 5th of following quarter.