Dear Sir,
When Vehicles are sent for repair and servicing it is a works contract. The service provider charges service tax on service portion and VAT on material portion in the same bill.
Now as a recipient of service, are we liable to pay service tax under reverse charge as it is a works contract. If yes, then will it not be excess service tax as the provider of service has already charged service tax @ 12.36% on the value of service portion in the bill. Please Clarify.
With best regards
No Double Taxation: Recipients Not Liable for Service Tax Under Reverse Charge if Provider Already Paid in Full A query was raised regarding the liability of service tax under reverse charge for vehicle repair services, which are considered works contracts. The service provider already charges service tax on the service portion and VAT on the material portion. The concern was whether the recipient must also pay service tax under reverse charge, potentially leading to double taxation. Responses referenced a Tribunal judgment indicating that if the service provider has already paid the full service tax, the recipient is not required to pay again under reverse charge. It was advised to seek further clarification from the Service Tax Commissioner. (AI Summary)
TaxTMI 
TaxTMI 
TaxTMI 
