Revrse charge method

Queries 901 views 6 replies

one of my client is labour contractor (tile contractor). he is provied labour service to a builder. my bill is as belowe Labour chg. 100000/- Service Chg. 12360/- Total value is 112360/- the builder pay to us up to 30/06/2012 Rs. 111360/- and know he pay Rs. 102090/- (less TDS 1000) We want to know what is the right method of aacouning. b'cos my ladger is showing outstanding of rs. 9270/- i.e. 75% of service tax in this case revrse charge method is applicable of not.

Replies (6)

In respect of services provided or agreed to be provided by way of supply of manpower for any purpose, service provider will pay the service tax of 25% of bill value and recipient of service will pay the service tax of 75% of the bill value. 

In this case it is not supply of manpower, but works contract; since you are billing against your contract for laying tiles.

hence reverse charge is not applicable.

Friends correct me if my understanding is incorrect

 

 

Dear Vishal, as per Serial No 8 under Part II of notification no 30/2012 dated 20.06.2012, person providing the service of   "supply of manpower for any purpose" (being an individual, an HUF, a firm or an AOP)  is covered under Joint Charge Mechanism (JCM) wherein he is liable to pay 25% of the service tax. Balance 75% of the tax will be paid by the person receiving such services. JCM in this case is applicable only when the service receiver is a business entity registered as a body corporate. In such instance, the service provider has to charge only 25% of the service tax in the tax invoice along with the labour charges (Rs. 1,00,000 + 3090 in your case) and it is also advisable to mention that the balance 75% of the tax (i,e., Rs 9270) shall be payable by the service receiver.

Dear Prasad, Joint Charge Mechanism is also applicable in case of a person, being an individual, or an HUF, or a firm or an AOI, providing service covered under Works Contract to a business entity registered as body corporate. The percentage of tax liability shared by the provider and the receiver in this case is 50% each.

Originally posted by : SHRAVANA DOTA

Dear Vishal, as per Serial No 8 under Part II of notification no 30/2012 dated 20.06.2012, person providing the service of   "supply of manpower for any purpose" (being an individual, an HUF, a firm or an AOP)  is covered under Joint Charge Mechanism (JCM) wherein he is liable to pay 25% of the service tax. Balance 75% of the tax will be paid by the person receiving such services. JCM in this case is applicable only when the service receiver is a business entity registered as a body corporate. In such instance, the service provider has to charge only 25% of the service tax in the tax invoice along with the labour charges (Rs. 1,00,000 + 3090 in your case) and it is also advisable to mention that the balance 75% of the tax (i,e., Rs 9270) shall be payable by the service receiver.

Originally posted by : Dinesh Vanan




Originally posted by : SHRAVANA DOTA






Dear Vishal, as per Serial No 8 under Part II of notification no 30/2012 dated 20.06.2012, person providing the service of   "supply of manpower for any purpose" (being an individual, an HUF, a firm or an AOP)  is covered under Joint Charge Mechanism (JCM) wherein he is liable to pay 25% of the service tax. Balance 75% of the tax will be paid by the person receiving such services. JCM in this case is applicable only when the service receiver is a business entity registered as a body corporate. In such instance, the service provider has to charge only 25% of the service tax in the tax invoice along with the labour charges (Rs. 1,00,000 + 3090 in your case) and it is also advisable to mention that the balance 75% of the tax (i,e., Rs 9270) shall be payable by the service receiver.





 


but this is applicable only if the service receiver is Company. 

 


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register