Dear all,
One company is using security services of another company, should service recipent pay 25% of service tax amount. whether companies are covered under reverse charge mechanizam for security services or not.
Please help me with details.
Thanks,
Satheesh
@ satheesh, If service provider is a company say pvt ltd, then he will charge full service tax @ 12.3% in his bill. 25% is applicable to proprietors and firms.
Regards
Anandan.s
Previously Govt has a lot of material on reverse charge but last year govt brought a concept of "JOINT CHARGE MECHANISM" In this service provider and service receiver have share their service liability arising in a transactions.. one of them is security services in which
If a security service provider provides services to a a 'company' Joint charge works and he has to pay 25 % and receiver will pay 75 %
Also refer concept of Specified Person in this regard for full understanding of the provisions.
Case 1: If Service Provider is a Company, Charge 100%, i.e. 12.36% service tax in Bill. Entire Service Tax Deposited by Service Provider.
Case 2: If Service Recevier is a Comapny, and Service Provider is Not a Company; Charge 25% of the Service Tax in Bill. Mention the 75% of Service tax in the Bill, which the Service Receiver Company is supposed to Deposite to the Department.
Company will Deposit the 75% of service tax mentioned in bill directly to the Department. The credit if available will be taken in Excise returns of the next month, on the basis of GAR7 challan.
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