Service tax reverse mechanism

First of all Reverse Charge Mechanism does not applicable to PVT LTD and LTD companies.

Please check once again your querry?

 

Dear Mr Sathya pls make sure yourself before guiding others,

Reverse Charge Mechanism is applicable to those Companies which are formed under "Companies Act of 1956, whether it might be public ltd or Pvt Ltd Co... 

As Far referring to Mr. Sandesh querry a pvt Ltd Co,. can claim the input credit.. (limit is 50%)

Please find the Attached pdf file to solve your querry in detail.

Thank you.

Dear Amith ji,

I am not concentrated on claim of ST paid portion sir.

now I am clarifying clearly;

if services provider  is a company then RCM (partial payment) not applicable full portion of ST has to bear that PVT LTD OR LTD company only.

if a service provider is a individual or huf or AOP then only ST payment partial applicable.

dear sandesh,

to claim ST as CENVAT CREDIT

50% of ST under WCS is eligible on the strength of Service Provider bill, remain 50% of ST under WCS is eligible on the strength of GAR7 challan which is paid by you.

 

Cenvat credit can only be taken by the Service Provider as per rule(3) 1 of the Cenvat Credit Rules,2004.But being recipient of Service you can avail the credit of the tax paid under reverse charge method on the basis of tax payment challan subject to the basic condition that the same is used or utilsed in your activity.

My company(Under companies Act) is manpower service provider.Service receiver is also companies like Gail, ECL, THDC etc etc. We claim full Service tax from Service receivers but service receiver pay us only 25 % S.T. while they claim to pay 75% under ST Rev.Mechanism. I also agree that Service provider is company so do not come under this rule and liable to deposit 100 % ST. ST Deptt has fixed liability on us.We know that Service Receiver has deposited 75%ST. Why ST Deptt pressing us to deposit balance 75 % again with intt .ST is deposited but rules interpreted wrong ? How can we deal this situation. Should we have to go court ? Any higher officer can be appealed for this action ? What is relief for us ? Will you guide us? Your valuable guidance will help me ?Thanks.

Service tax reverse charge mechanism is applicable only for Company, where company register under companies’ act 1956.

 

Case-1

Where in case of service receiver is a Individual or HUF RCM is Not Applicable. 100% ST Need to borne by the Service Provider.

Case-2

Where in case of service receiver is a Company and service provider is a Individual or HUF, RCM is applicable.

Case-3

Where in case of Individual and HFF is availing RCM is not entitled take input credit.

 I am from consulting firm and i do place candidates as per the client reqirements and i do raise a bill off 8.33 % of the candidate CTC if gets placed. Now i am not crossing the limit every year .( turnover is not crossing the limits then surely Service Tax is not applicable. And  now Service tax limit is extented to 15 Lakhs .)                                       Note : If the aggregate value does not exceed the limit in that Financial  year , then the Service Provider need not pay any service tax. Only if that Limit exceeds, he should apply for service tax number and charge the service tax to the customers he is servicing.      But here my client or the service receiver says they are Pvt Ltd company and so they have necessity to pay service tax for my bill amount if it is applicable or not. So he is deducting 25% from my bill amount which ever i raise.  I want to know without service tax number how can the service receiver deduct the service tax. And only if  it is applicable they have to see in which clause the service provided comes and accordingly they have to pay the service tax to the service provider and then the service provider should get the payment from the service receiver and then  pay to the government through his service  tax number. Right ?
 

help me on this issue ? Clarify pls