Unpaid service tax

Queries 759 views 3 replies

Neeta

Principal Consultant

28 Points Joined October 2014

I am into recruitment business and as advised by my CA, had applied Point No 8 of MOF,Notification No. 30/2012 regarding RCM of 75% payable by the client while I paid 25% of service tax. By chance, it has been discovered that few of the clients have not paid the required tax under RCM. My query is what is to be done now-

1) Should I raise a Debit note for unpaid Service Tax? and

2) Is there a further service tax on that pending amount when I raise a Debit Note?

Please help, as I have been told that being originator of the invoice the responsibility is mine and will have to face all 'music' if in a scrutiny it is found that some amount is unpaid....thanks

Replies (3)

CA GAURAV JAIN

C.A.

39 Points Joined October 2010

Its the responsibilty to pay 75% service tax by service receiver. If he does not paid the service tax then he cannot claimed CENVAT credit. For service tax paid on reverse charge, credit may be claimed based on the TR-6 challan by which payment is made. Service receiver will not pay the service tax from cenvat credit under the reverse charge mechanism

Manoj Agarwal

Service Tax Consultant Rourkela Service

3456 Points Joined March 2012

Dear Neeta,

What I understand from your query, you are providing the service of manpower recruitement. This service was treated at par with service of 'supply of manpower'. However, w.e.f. 01-07-2012, due to change in definition of 'supply of manpower' service, the servie of manpower recruitement is not covered and therefore, reverse charge is not applicable in your case. So, prima facie it seems that your CA has erred in advising you to charge service tax on only 25% value. This may be the reason why some service recipients have not paid service tax on 75% portion as they are not liable to pay the same.

Kindly email for furhter clarifications, if any.

servicetaxexpert @ yahoo.com

CA Ashish K Bansal

partner

175 Points Joined July 2011

If you are supplying manpower then 75percent to be paid by client if client is acorporate if client diesnot deposit no resposiblity can be accrued on you however if client is not a corporate you ate l8able to pay full tax even if you are providing only recruitment service only then also full tax has to be paid by you