Contractee’s responsibility under reverse charge (work contracts) as per amendments of Budget FY.12-13

[umesh kumar]

 

Dear Sir,

We as a contractee going to finalized works contract for FY-12-13.

What would be our responsibility under reverse charge as a contractee?

Is any other change in service tax under the budget of FY-12-13 which should be kept in mind as a contractee?

 

Thanks

Jai

 

AI Summary

Guidance on Reverse Charge Mechanism: Contractee's 50% Service Tax Responsibility for Works Contracts in FY-12-13 Amendments. A contractee inquiring about their responsibilities under the reverse charge mechanism for works contracts in the FY-12-13 budget amendments received guidance on service tax obligations. The amendments require both service providers and recipients to share the tax burden in specific cases, such as renting vehicles, manpower supply, and works contracts. For works contracts, the contractee is responsible for 50% of the service tax. An example was provided to illustrate the calculation of service tax on a contract value, highlighting the importance of accurate valuation based on documentation or prescribed percentages.