RCM NOTFICATION 30/2012

[MITSUI PRIME ADVANCED]

Dear Sir,

our vendor turnover not exceed limit of service tax area but as per circular we will full-fill our liability at the rate of 75 percent under Manpower Service who is not company under company Act 1956.

Pl. advice to us service provider means vendor not covered under service tax area ceiling limit so in such case we will full fill our liability part  75 percent of gross amount  under Manpower service

pl. provide your good advice.

Thanks & Regards

Arjun Sachdeva

Mitsui Prime Advanced ,

Neemrana

[Brijesh Verma]

Dear Arjun

While taking a look at the RCM notification 30/2012, you need to disregard the concept of threshold limit of Rs. 10 lacs.

Even if your vendor is below that limit but his services are covered under RCM, then your part of tax liability will have to be discharged.

[YAGAY andSUN]

Under RCM, the Service Recipient cannot avail the benefit of threshold limit.  Service Provider can avail such benefit. 

[MANDAVILLI RAMAKRISHNA]

whether you are paying commission to the supplier or paying total wages for the man power employed to you. if total wages for the man power is paid to your vendor, you will be liable for the total service value ofcourse, after deducting reimbursement of expenses.

you have to bear your part of service tax under RCM irrespective of the fact that the vendor is under the ceiling limit. how ever, you can claim reimbursement expenditure from the total service value like: food, residence, uniform cost etc.,

 

AI Summary

Reverse Charge Mechanism: service recipients must discharge tax on manpower supply services even if provider is below threshold. Reverse Charge Mechanism under Notification 30/2012 requires the service recipient to discharge service tax on notified manpower supply services regardless of the service provider's threshold exemption; the recipient must remit tax on the gross service value after permitted reimbursements (for items like food, residence and uniform), and the taxable base depends on whether payments constitute commission or total wages paid for manpower.