Urgent reply

Asumed that company is liable to pay ST under RCM.......so co liable to pay ST on Rs. 2500 less 75% available Abatement).......co is required to pay the tax from its pocket but it can take the credit of such ST under Rule 9(1)(e) treating the same as input service.

Thanks saurabh for the reply.

As u said that the co. need to pay ST on 2500*3.09% after abatement.

but cant the same cannot be paid using back calculation treating the sum of Rs 2500 as inclusive of service tax

No , perhaps not....because the Rs. 2500 was not inclusive of Tax because Service receiver cannot assume that he has paid invoice Amt inclusive of ST....because if the same coul\d be assumed then it means that Service provider has recovered St...which is not permitted ...

Since, Service tax is not mentioned on the invoice.

so assuming that the provider is not in the taxable territory and is not liable to charge service tax.

But as per RCM, the receiver has liability to pay st.

Considering this as inclusive of taxes.

The receiver is liable to pay 100 % tax.=

2500/112.36*12.36=275

As per clause (2) of notification 30/2012-ST, dated 20-06-2012 service tax is payable by recipient of service in respect of services provided by goods transport agency for transportation of goods by road where the consignee or consigner is of the specified class (i.e. factory registered under Factory Act, society registered under Societies Registration Act, Co-operative society, dealer of excisable goods registered under Central Excise Act, a body corporate established under any law, a partnership firm).

Para 2 of this notification provides that service tax is payable by the person who pays or is liable to pay freight by himself or through agent for transportation of goods by road in goods carriage located in taxable territory shall be treated as person who receives service for the purpose of this notification.

Abatement: As per entry no.7 of notification 26/2012-ST, dated 20-06-2012 the service tax is payable on 25% of gross amount charged. The abatement of 75% is permitted. Issue of consignment note is mandatory.

Conclusion: Reverse Charge is applicable at 3.09% (12.36%X25%).

Regards

HI

VISHAL

CACLCULATION OF SERVICE TAX AS GIVEN BELOW: -

FREIGHT VALUE                     --  2500

LESS : ABATEMENT @ 75%  --  1875

TAXABLE VALUE                      --    625

SERVICE TAX   -     625*12.36/100  ==   Rs. 77.25

pls give answer for works contract  service tax calculation