reverse charge mechanism

[satya narayana]

sir,

we contracted to errection of cell tower through one firm mean while the same was cancelled due to public problem such as radiation . then the firm claimed a bill for unfinished work (damages) in this case is covered for paymnet of  service tax under reverse charge mechanism. my doubt is this is unfinished job, hence is it traeted as service recieved and due to pay any service tax , income tax, labour cess, w.contract tax..ect.

satya.

  

 

[DR.MARIAPPAN GOVINDARAJAN]

Even though the job is an unfinished one you have to pay service tax on the value of services received by you.

AI Summary

Reverse charge mechanism: recipient must pay service tax on value of services received even for unfinished contracted work.
Query on applicability of the reverse charge mechanism where contracted erection of a cell tower was cancelled and the contractor billed for unfinished work; the operative response: the service recipient must pay service tax under reverse charge on the value of services received, notwithstanding the job remained unfinished.