deposit of service tax under reverse charge

[S.C. WADHWA]

An individual furnishes a bill showing service tax 12.36% towards AMC of

EPABX. On such service we as a company is required to pay service tax

on reverse charge mechanicm.

Now what we should do,

Whether to obtain written decalartion from him that he has deposited the

service tax or

We should deposit our share of service tax and give him debit note.

AI Summary

Company Debates Service Tax Liability: Reverse Charge Mechanism or Rely on Provider's Tax Payment? Legal Precedents Cited. A company is faced with the issue of whether to pay service tax under the reverse charge mechanism for services received, where the service provider has already included service tax in the bill. The discussion includes various opinions: one suggests obtaining a written declaration from the service provider confirming tax payment, while another advises paying only the service portion and settling the tax directly with authorities. Legal precedents are cited, indicating that if the service provider pays the tax, the service recipient should not be liable again. However, documentation and proper contracts are recommended to avoid disputes.