partial reverse charge on job work

[RAM AVTAR]

WHETHER PARTIAL REVERSE CHARGE MECHANISM APPLICABLE ON JOB WORK (I.E. LABOR RATE SUB CONTRACT)

[YAGAY and SUN]

It will depend on the facts of the matter. If it is proved that this is the case of supply of labour then reverse charge mechanism would be applicable where the service provider is LLP/Individual etc.

[Mritunjay Kumar]

Dear Mr. Ram,

Partial reverse charge mechanism will apply in case there is supply of labour. You have to look into the facts that whether there is supply of labour. Service provider will be liable to pay 25 percent of service tax, balance payable by service receiver.

Regards,

CA. Mritunjay Kumar.

9718563447

Delhi.

AI Summary

Partial reverse charge applies to job work when characterized as supply of labour, creating shared tax liability between parties.
Partial reverse charge applies to job work when the transaction qualifies as a supply of labour; factual analysis of the arrangement determines applicability. Where supply of labour is established, the reverse charge mechanism leads to a split tax liability with the service provider bearing part of the tax and the service receiver bearing the balance.