TaxTMI 
TaxTMI 
What should be the duty liability of recipient of service under RCM if he is a residential complex builder receiving service under works contract service if service value is 1,00,000. Will it be 50% of 12.36% of ( 25% of 1,00,000) in light of Explanation II of Not.No. 26/2012-S.T OR something else. Deptt. is insisting for 50% of (40% of 1,00,000). Please give your valuable advise.
works contract service
17 Nov 2015 
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Reverse Charge Mechanism: recipient liable for works contract service tax under valuation rules and available exemptions determine taxable share.
Reverse Charge liability for works contract services hinges on whether services are original construction or repair and on interplay between the Determination of Value Rules and Notification No.26/2012-ST; original works use the works-contract valuation proportion, the recipient must discharge tax under RCM on that taxable share, and where the notification applies a reduced taxable base may be claimed with selection of the most beneficial provision. (AI Summary)
Reverse Charge liability for works contract services hinges on whether services are original construction or repair and on interplay between the Determination of Value Rules and Notification No.26/2012-ST; original works use the works-contract valuation proportion, the recipient must discharge tax under RCM on that taxable share, and where the notification applies a reduced taxable base may be claimed with selection of the most beneficial provision. (AI Summary)