Reverse mechanism

[mk Jain]

Dear Sir,

Please reply my querry for service tax payable under reverse charge.

If I ahave received the bill of GTA service in july for june month service and date of invoice also mentioned in June17

then under reverse charge mechanism what is the liability, As per me liability is as per service tax rate ( 14+0.5+0.5) after 70% abatement. But how can we pay in new tax regime.

Rgds,

MJ

[KASTURI SETHI]

If service has been provided in June, 17 and invoice has been issued in June, 17 and only payment has been received in July,17, liability is towards Service Tax.

[DR.MARIAPPAN GOVINDARAJAN]

For the month of June 2017 you have to pay service tax under reverse charge mechanism as told by Shri Sethi. But in GST regime there is no abatement. 100% of applicable tax is payable.

AI Summary

Reverse charge liability: tax arises when supply and invoice occur, and GST removes prior abatement allowing full tax payment. Reverse charge liability for GTA services arises when the service is provided and invoiced in a prior tax period, obligating the taxpayer to discharge service tax for that period even if payment is received later; under the GST regime, no abatement applies and the full applicable tax is payable where reverse charge applies.