Reverse charge on services by Government

[SARAVANAN RENGACHARY]

Hi,

We give our product to Government department for testing purpose as we do not have such testing facility in our concern. We pay testing charges to such Government entity and pay Service Tax under reverse charge mechanism as per NTF 30/2012 SL No. 6.

when I file the return for 15-16 II qtr, ACES says that this NTF 30/2012 serial no. 6 is not available for the return period.

please clarify whether service rendered by Government (Testing Service) on payment basis comes under reverse charge mechanism or not.

[Rajagopalan Ranganathan]

Sir,

Sl. No. 6 of Notification No. 30/2012-ST has been amended by Notification No. 18/2016-ST to omit the words "by way of support service". If you use support service while filing your return for the 2nd half year (not 2nd quarter) of 2015-16, then ACES may say hat this NTF 30/2012 serial no. 6 is not available for the return period. You simply say "testin g service provided by Government". Then it will be accepted.

AI Summary

Reverse charge on government testing services applies; classify and report receipts as testing service to ensure return acceptance. Taxability arises where a business procures paid testing services from a Government department: such services are subject to the reverse charge mechanism and must be declared in the recipient's service tax return as testing services, reflecting an amendment that removed the prior 'support service' description so that correct service classification ensures acceptance by the return filing system.