Under reverse charge st liability discharged by sp instead

392 views 2 replies

HI, My client(Pvt co ) has availed Security services from an agency ( Sole prop) from the year 2012 since then the agency has been raising the bill on my company for entire service tax portion and we have been paying him the amount. The security agency has been remitting the amount towards government . Recently during Excise audit , Superintend of Excise had pointed out that 75 % of service tax portion was to be paid by service reciever under reverse charge // Now my query is Will the company be treated as in Default for not paying 75% portion or can i argue that Service liability for 12.36% was paid by service Provider Kindly advice 

Read more at: /experts/modify_message.asp?entry_id=1018597

Replies (2)
The primary liability to pay Service Tax (75%) is of the company. However, there can be an alternative of obtaining challans from the sole proprietor for the amounts paid to the government by him/her for the given period. These challans can be produced to the aidit officials and they can be requested not to insist for payment of 75% amount, since it amounts to double payment. The situation may be explained on the grounds of natural justice, only if challans are available.

The present law is 100% payable by service provider. In betweenit was 75% by reciver and 25% by provider.

As long as you canget confirmation that provider has paid the whole amount, collection from reciver wouldbe double collections and not authrised by law. Several decisions are there. 

Going forward however to avoid litgation you may ask the provider not to charge and reciver can pay 100%.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
24 June 2026
Chartered Accountant

CA Darshita Shah & Co

Nadiad

CA

View Details
Company
24 June 2026
Senior Account (VA Client Operations)

Karbon Business

Bengaluru

CA Inter

View Details
Company
12 June 2026
Accounts & Taxation Executive

Winshine Financial Services

Mumbai

CA Inter

View Details
Company
ARTICLESHIP 09 June 2026
Article Trainee

Numbertree LLP

Mumbai

CA Inter

View Details
Company
20 June 2026
Assistant Accounts Manager

Fintax Professionals

Gurgaon

CA Inter

View Details
Company
ARTICLESHIP 27 June 2026
Article

SNCO

Mumbai

CA Inter

View Details
Company
Featured 15 June 2026
Senior Auditor

N. Dhawan & Co

New Delhi

CA Inter

View Details
Company
19 June 2026
Accounts Executive

Getfive Advisors Pvt. Ltd.

Ahmedabad

CA Inter

View Details