Service tax 12.36% or as rcm basis

Queries 618 views 2 replies

maharaj

accountant

165 Points Joined October 2009

Dear Expert and all.

I have one client doing business with them and right now we have registered with ST last few months back. Now I have raised a bill with ST on actual basis i.e. 12.36% and also paid that S.Tax amount to the government through online as 12.36% on quartly basis as proprietorship business. Payment was due from S. receiver and now they want to may me the Actual service bill amount and 50% on S.Tax amount . They don't agree with actual amount.

We have not registered with works contract tax. Before generate the bill already give them S.Tax registration photo copy as per their requirement and give them also phtoto copy of tax submit challan as per their requirement.They are big LTD company. We are providing labour charges services for machinery parts and pattern works. Earlier it was purly labour charge bill before s.tax registration and done business with them more than two years. We have registered with S.tax only business with them as a only service provider. We have no such services for Input claim at this moment.

I have proprietorship business with turnover within 15-20 laks p.a.

I have two questions? plz advice.

1. Should I charge actual basis i.e. 12.36%. or RCM basis 50% -50%. I have no RCM registration.

2. Should I amend Regs. of S.Tax with added RCM. If amend then I have to paid 50% s.tax and 50% will be paid by s.provider. What will be Input claim amount from myself in department with RCM basis. Need one example with Bill amount and rate as per Newly updated RCM rule.

Urgent. Expect advice from Expert.

Thanks.

Replies (2)

Venkatanarayana GM

Partner associate at Hiregange & Associa

1279 Points Joined November 2009

Dear Mr. Maharaj,

If your supplying Manpower to that company then you have to register under the category called Manpower Supply Services and Your charge 25% on 12.36% i.e 3.09 % on the Gross Amount and remaining company will take care.

Secondly, if you provide both material and Supply of Manpower and the transaction amounts to Works Contract the, you may have to register under the category of "Works contract" and you have to Charge 40% on Gross amount and = 50% on 12.36% you may need to deposit to Exchequer (If it is original works) and remaining company will take care.

If your Not clear with this explanation, please go through 30/2012 notification in CBEC.GOV.IN.

Thanks

maharaj

accountant

165 Points Joined October 2009

Hi Venkat I am also thinking for amend thr RC of ST with works contract. If I regs. with works contract tax. Then please clarify the below details with rate charge and amount as Stax on that bill and also Input tax is available then at what way we can claim. From the point of view of S.Provider also. Its orginal work just we bring my labour staff to their Factory Premises and done some machinery reparing also including pattern works. Not clear about your excheker payment??

e.g. Actual Service Bill Rs. 10000/-. Please give me a example with a Bill.

Thanks.