reverse charge mechanism

[raj nadh]

Dear Experts,

Please clarify that What is reverse charge mechanism in service tax and for which services it is applicable ?

Anand

[YAGAY andSUN]

Dear Anand,

Reverse charge mechanism consists of following two aspects, namely:-

1. Full Reverse Charge Mechanism
2. Partial Reverse Charge Mechanism

Under Full Reverse Charge Mechanism, the service recipient is liable to pay the service tax on the full value of the services provided by the service provided and under Partial Reverse charge Mechanism service provider and service recipient both would be liable to pay the service tax to the extent of their liability as mentioned in below notifications,

Please check the Notification No. 30/2012-ST/20-06-2012 w.e.f. 01-07-2012 read with Notification No. 10/2014-ST in this regard.

Regards

Team YAGAY and SUN

(Management and Indirect Tax Consultants)

[Mahir S]

Under Reverse Charge Mechanism, service tax is payable by service recipient instead of service provider . Under this charge service receiver have to register himself under service tax .

Please study notification no. 30/2012 S.T. dated 20.06.2012 as amended for necessary understanding on the issue.

 

AI Summary

Reverse charge mechanism shifts service tax liability to the service recipient, with full or partial recipient liability under notifications. Reverse Charge Mechanism shifts service tax liability to the service recipient, operating as Full Reverse Charge (recipient solely liable on the entire service value) or Partial Reverse Charge (liability apportioned between provider and recipient); recipients must register for service tax and follow the notifications specifying which services and apportionments apply.