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Service tax reverse charge
our client is works contract service provider(proprietor); provides service to company; company paying 50% service tax by deducting our income; and again our client paying remaining 50% from his own pocket. so it looks like our client paying full100% service tax from his own pocket.according to my knowledge 50% st company has to pay from his own pocket & balance 50% should be given to the service provider. i want help whether the company(service receiver) is doing right accounting
Replies (1)
It should be like this
If the value of Service as Rs.100000/-
Tax on 1st half i.e. 50,000*12.36%= 6180/- should be paid by the SR to the Govt.
Tax on 2nd half i.e. 50000*12.36%=6180 should be paid by the SP to the Govt.
SP will recieve from SR 100000+6180=106180/-
Hope it will help
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