Service Tax on Reverse Charge Mechanism

[Ashwani Rustagi]

Can you please advise whether we need to pay service tax on the following items under Reverse Charge mechanism for the amount payable to indivisual or firm:

1. Printing & Stationary - specifically printed stationary for the company;

2. Rent of photocopying machine & photocopy charges

3. Purchase of Uniform with company logo on this.

 

Thanks,

Ashwani Rustagi

9810013724

[NANDKUMAR SAGWEKAR]

Dear Ashwani Rustagi

In case of transactions referred by you, We have to see the bills and contract in between your company and service providers , because these are very special cases may involve works contract ( under state law / Central Law )

Thanks

 

ANAND M SHEMBEKAR

CELL 9421187122

 

[YAGAY andSUN]

Replies to your queries:-

1) There would not be any service tax will be applicable on printing & stationery items specifically printed for the use of company.  It was held in the Thompson Press case by the Punjab and Haryana high court that it would come under the  purview of works contract tax under VAT Laws.

2) On renting of phocopying machine and photocopy charges both VAT and service tax is payable.  Ratio would be depend on the nature of contract.

3) On purchase of Uniform on which company's logo have been engraved there would not be any service tax involve but WCT under  VAT Law may applicable.

AI Summary

Service tax on reverse charge may not apply to printed stationery or uniforms; photocopier rentals may attract tax. Applicability of service tax under the reverse charge mechanism depends on the legal character of each transaction and contractual documentation. Specifically, printed stationery and company-branded uniforms are generally not subject to service tax if characterised as works contract or sale of goods (state works contract/VAT may apply), while photocopier rentals and photocopy charges may attract both VAT and service tax depending on whether the arrangement is hire of goods or a composite service as per the contract.