Reverse mechanism under service tax

Hi Tejas

Even i feel that   if the service provider has a service tax registeration No and  if  provider charges service tax in the invoice

Then it would be better to pay service tax to the provider and get away  with  the provision as receiver

Some one can please guide us in this regard

Yes 

The notification is binding on both the service provider and the service receiver .

Th service provider have to clear cut mention in his invocie the amount of service tax payable by him ( i.e. service provider ) and the amount of service tax payable by service receiver .

Just 3 services are hit by this Notification. The hardest hitting thing would be Service Tax on Works Contract.

Renting of vehicles for carrying passengers, manpower supply and Works Contract are the services which have been bifurcated.

Yes, it definitely causes complexities in an already complex situation.

When will GST Come?

Hi..

It is in the view of the Govt to collect any collectable apart from the abatement which is already given to the service provider.

If service receiver should also go for registration; it is sure that minimum 5 lacs new assessee from each metro will be at que..

Under reverse charge provisions, Service receiver is liable to pay service tax on works contract service, manpower, transport of  passengers etc.   Whether service receiver has to take registration for said services or just mention in return - payment under reverse charge.

kindly advise

Service receiver shall not pay the service tax to service provider. It is the liability of service receiver to get himself register under service tax as service recipient and pay the tax to government and file the service tax return. 

It is provided u/s 68(2) that all the provisions of this Act shall accordingly apply on the service receiver. The situation where both service receiver and service provider are liable to pay service tax will create double burden on the assessee. Both of them needs to file service tax return for the same transaction.

For more detailed descriptttion on Reverse Charge mechanism, please visit the below: 

https://www.slideshare.net/caashish/reverse-charge-mechanism-13357775

I hope this will give you a clear picture on this topic...