Service tax on security charges??

Queries 3495 views 6 replies

SANJAY

CHARTERED ACCOUNTANTS

943 Points Joined January 2011

Dear members,

As per new reverse charge mechanism, if Service provided by Security agency (Proprietor) to a company then, service tax laibility is on service reviever is 75% and on proprietor it is 25%.

But my question is that, what if the proprietor has charged 100% service tax in invoice?? Whether the company is liable to pay 75% of Service tax or not? if yes then, isn't the total tax will be paid more than 100% to the govt revenue.

Or we have to ask to the service provider to change the Invoice bill and charge 25% service tax only..

Please clarify me..

Thanks in advance..

Replies (6)

s.sudhakar

accountant

52 Points Joined August 2012

Hi sir,

we can ask to vendot to change the invoice.

regards,

Sudhakar.S

Arun Kumar Singh

GST Advocate

15220 Points Joined January 2009

As per reverse charge mechanism recipient will pay service tax on the value of 75% and provider will pay 25% of the total value. If recipient will received the services from Pvt. Ltd. Company then only service provider will pay the service tax.

pradeep

accounts executive

33 Points Joined May 2012

can the service recipient claim a cenvat credit( @ 75%) on the payment of service tax on the security charges

CA venkata Rao P

professional

21 Points Joined February 2010

Rule4 A of service tax rules provides for issuance of invoice by service provider. Further as per clause (IV) of Sub rule (1) “service tax payable thereon” shall be indicated on the invoice. Accordingly entire amount of service tax shall be shown on the invoice.

Unmesh

Consultant

83 Points Joined July 2010

Company has to pay 75% of service tax even if 100% charged by security agency, now you can only ask your security agency to change the bill and don’t pay him 75% of tax amount. although security agency has to charge "service tax payable thereon" on the bill as per rule4a of s tax rule, but it is not cleared payable by whom by service provider or receiver or both, so i will suggest he can show st payable by him and stax payable by service recipient separately in the invoice