Works contract

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In case where service provider is not reg under service tax, in reverse charge mechanism whether their is a liab of service receiver to pay service tax.
Replies (3)

You need to deposit your part of service tax liability as a service receiver irrespective of the fact that service provider is SSp and not registered under S.T. For more detail refer https://www.capitalmarket.com/CMEdit/story11-37.asp?SNo=787955

If one is a corproate and availing services from the small service provider of works contract then on 50% of the bill you need to pay normally 40% at the applicable rate which today is 14.5. .50x.40x14.5%x amount of bill = ST payable. 

SERVICE TAX LIABILITY FOR SERVICE RECEIVER IN CASE OF REVERSE CHARGE MECHANISM IS INDEPENDENT OF THE THE LIABILITY OF SERVICE PROVIDER AND IS NOT DEPENDENT ON THE FACT WHETHER SERVICE PROVIDER IS REGISTERED OR NOT. SERVICE RECEIVER HAS TO DISCHARGE ITS LIABILITY EVEN IF SERVICE PROVIDER IS NOT REGISTERED OR IS AVAILING BASIC EXEMPTION LIMIT AS AVAILABLE FOR SSI's.

SERVICE TAX LIABILITY FOR SERVICE RECEIVER UNDER REVERSE CHARGE MECHANISM IS APPLICABLE FROM RS. 1 ITSELF AND THERE IS NO EXEMPTION AVAILABLE.


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