My CLient is engaged in the business of Interior decoration of services and is covered under the Works Contract.Currently he has opted for COmposite scheme under both Vat & Service Tax Rules.The new notification under the 15/2012 says that the liabilty to pay service tax is of 50% of Service Provider & 50 % of Service Receipient.My Query here is that no where the notification specifys whether it applicable for COmposite dealer or Non COmpisite Dealer or Both.So Can any one please give an advise (or) opinion on the same if the same notification is applicable for Composite Dealer?
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Service tax notification 15/2012
Replies (1)
Firstly, Notification No. 15/2012 is replaced by new Notification No. 30/2012 dated 20.06.2012.
Secondly, on or after 01.07.2012, composition scheme for works contract is no longer prevailing. The New valuation rules (Rule 2A) for the purpose of determining the value on which service tax is payable (under works contract) is given by way of notification no. 24/2012.
So, under reverse charge mechanism, whether you opt for regular method, or abatement method (as specified in the rules as stated above), 50% has to be paid by service provider and 50% is to be paid by the service receiver.
Further, reverse charge mechanism is applicable only in the following cases:
- Service provider is an individual, HUF or a partnership firm
- Service receiver is a Body Corporate.
Hope your doubts are clarified.
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