labour contract

[mali chand agarwala]

if my labour supplier not charged st 25% as he has no st registration then it is compulsory for me to pay 75% as i am also not registered under st

AI Summary

Service tax under reverse charge not applicable to unregistered firms; liability falls on registered corporate entities. A user inquired about their obligation to pay service tax under the reverse charge mechanism if their labor supplier, who is not registered for service tax, does not charge it. One response clarified that the service receiver must pay the tax, even if the provider is unregistered, covering 75% of the liability, which can later be claimed as CENVAT credit. Another response noted that reverse charge applies only if the service receiver is a registered corporate entity. Since the user's firm is not a registered corporate entity, they are not liable to pay the service tax.