Applicabilty of full reverse charge to Manpower supply service

[THESINGARENI COLLIERIESCOLTD]

As per the amendments made in the Union Budget 2015, full Reverse Charge has to be applied for Manpower Supply Service and reduction in abatement for GTA Service from 75% to 70% from 01.04.2015.

In this regard, please arrange to clarify on applicability of amended provisions for the following transactions.

1. Work completed on or before 31.03.2015 -

a. Invoice raised after 01.04.2015 and payment also made after 01.04.2015.

b. Invoice raised before 31.03.2015 but payment made after 01.04.2015.

2.Work completed after 01.04.2015 but invoice was raised and payment was made before 31.03.2015.

[venkat eswaran]

U said from effective from 1.4.15 but this is effective date not mentioned in the budget. first FB 2015 to be passed in the parliament and President has to approve it after that separate notification will come then only it will come into force.

venkat

[Mahir S]

Sir,

With effective from 01-04-2015, 25% of the Service tax which was earlier liable to paid by service provider will be shifted in the hands of service recipient, thereby increasing the effective Service tax liability to be paid by service recipient from 75% to 100%.

For your clarification on the points raised in your query, please refer rule 3 and 7 of Point of Taxation Rules, 2011.

[Ramanujam Varadarajan]

Full reverse charge on manpower supply service or security service would come into effect from 1.4.2015. In case of services completed and bill raised prior to 1.4.2015, service provider would be required to deposit service tax at 25% in terms POT rules. If payment relating to such instances is paid after 1.4.2015, liability of 100% service tax under reverse charge would apply in the hands of recipient.

One suggestion is while effecting the payment for invoices relating to such services raised prior to 1.4.2015, but paid after 1.4.2015, recipient can obtain a declaration from the service provider that 25% service tax is deposited in such cases and deposit service tax at 75% value. If invoice itself raised after 1.4.2015, recipient can inform the service provider that service tax under reverse charge at 100% would be payable by them.

AI Summary

Full Reverse Charge on Manpower Supply Service: Tax Liability Shifts to Recipient from April 1, 2015, Per Budget Amendments. The discussion focuses on the applicability of the full reverse charge for Manpower Supply Service following amendments in the Union Budget 2015, effective from April 1, 2015. Queries were raised regarding transactions completed before this date but invoiced or paid afterward. Responses clarified that the full reverse charge would apply from April 1, 2015, shifting the service tax liability entirely to the service recipient. If services were completed and billed before this date, the service provider would be liable for 25% of the tax, with the recipient covering the remainder if payment was made after April 1, 2015.