Service Receiver and Service provider

[Raja krishnan]

Dear Experts,

Repeatedly i am little confused about the Service Receiver and Service provider meaning as well as under RCM so any experts clarify this subject briefly please.

[Ganeshan Kalyani]

In common parlance, the person who receives/avails the service is the service receiver and the person who provides the service is the service provider. For eg. if an Advocate provides legal service to a company, in this case the advocate is a service provider and a company a service recipient. and the notification for reverse charge the proportion of liability to pay service tax has been divided among both the party i.e. service provider and service receiver. Both will have to pay his portion of service tax under his registration. in the example, given above the advocate liability to pay service tax is NIL, whereas the company shall pay service tax at the rate prevailing presently.

[KASTURI SETHI]

Under reverse charge mechanism, receiver of service is to be treated as Service Provider for payment of Service Tax as per Section 68(2) of the Finance Act, 1994.

[PARTHASARATHY V]

Sir,

Service Provider: The person who is rendering service in agreement or not for any consideration or free of cost is called as service provider.

Service Receiver: The person who is receiving services in agreement or not is Service Receiver, in terms he has to pay for the services rendered.

Reverse Charge Mechanism: This is special case, certain cervices listed in the ST Notification 30/2012 some of the services identified, on which the receiver of the services will be treated as provider of service and pay service tax on behalf of the service provider.

Import of service under RCM: under section 66B when the service provider is out of taxable territory and service receiver is in taxable territory, the receiver of tax has to pay the service tax liability under Import of service.

[VRR NISTALA]

service provider is the person who provides service.

Service receiver is the person who receives service.

Normally service provider is liable to pay service tax.

but in certain cases, service receiver is made liable to pay service tax fully and in some cases partly .This is reverse charge mechanism. There is no of deemed concept. of service provider in cases of service receiver in reverse charge mechanism.

The person liable for paying service tax is the correct concept. It is defined in Rule 2(d) of the service tax Rules1944. Notification No. 30/ 2012 provided the percentage of tax liability on service provider and service receiver in respect of the services given therein in the circumstances given therein. .

AI Summary

Exploring roles in Reverse Charge Mechanism: Service receiver may pay tax under Section 68(2) of Finance Act, 1994. A discussion forum addresses the roles of service receivers and providers under the Reverse Charge Mechanism (RCM) in service tax. Participants clarify that the service provider is the entity offering a service, while the service receiver is the one availing it. Under RCM, the service receiver may be liable to pay the service tax, partially or fully, instead of the provider. This mechanism is guided by Section 68(2) of the Finance Act, 1994, and specific notifications like 30/2012, which outline the tax liabilities for both parties in certain services.