Service tax reversal mechanism in execution of work contract

Notifications 2200 views 6 replies

Sir/Mam , As per the latest notification on 1.07.2012, ST would be charged on 40% of the bill assuming that 40% to be the part of service and both the service provider and service receiver will pay 50% to govt ... i have a doubt that if the service provider collects from us 100 % of ST and deposits to the govt , is our liability waived off or we will still have to pay and the excess payment we made will be setoff in the upcoming return ? 

Replies (6)

Hey

        As per the rule the service receiver has to pay his share of the service tax liability mandatorily. The fact that he has already paid the entire 100% of  ST to the Service provider does not absolve his liability.  However you will get credit for that 100% tax paid directly to the service provider. 

HI

one of our Transporter load the goods from factory & offload the same in client's side and raised invoice ( Builty ) in which no service tax is charged while he is registered with service tax deptt. having turnover about 40 lacs and  on invoice , transporter mentions that Service tax paid by the party.

mu query is this , do I need to deposit the service tax or transporter will deposit the same.  will I need to change in the service tax registration.

 

thanks in advance

 

1)Legal liability is of service receiver.

 

2)That liability does not disappear even assuming that the service provider has paid the service tax.

 

3)The department can insist on payment of service tax from you [In respect of past, may be you can get away by claiming that it is only procedural mistake and no revenue loss. However, for future, please do not do it].

 

Thanks & regards

Ganesh babu k

Billing in reversecharge:-

1)Service provider should charge only his part of service tax

2)Service receiver to pay service tax of his part by GAR-7 challan

3)Service receiver liable for only his part and not entire amount, even if service provider does not charge his portion of service tax.

 

Thanks & regards

Ganesh babu k

Thankyou ev1, that was very helpful...

if Transporter impose service tax @ 3.09 % ( 25%*12.36% ) on invoice do I need to deposit the balance service tax @ 9.27% 

for exp- Service value                  10,000

service tax @ 3.09%                          309

total                                                   10309

who will deposit the balance payment or it is exempted on transporter.

 

pl suggest 


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register