Service Tax Payment even if the service provider is exempted.

[Guest]

It is said that if the turn over of the service provider is less than 10 Lacs then he is exempted from service tax but same is not true for the service receiver. Then how service receiver will be convinced that his service provider has paid the right amount of the service tax because by the service receiver, service tax is paid extra at actuals after the submission of the documentry proof by the service provider?

 

-Regards,

Saurabh

[vasudevan unnikrishnan]

Once the service provider is within the threshold exemption,there is no liability to be shared by the receiver.In the reverse charge method,first the quantum of tax is to be worked out in the invoice and then the same is to be shown with the split of 'paid by SP'(service provider) and balance to be paid by the SR(service Receiver).Thus ,in the instant case tax payable is NIL within 10 lakhs.and thus nothing is to be paid by the receiver.Moreover,as per notification no 30/2012-ST,,sharing is applicable only when the service is provided to body corporate;no sharing when both SP and SR are body corporates or both are non body corporates.

vunnikrishnan,

email:[email protected]

[Harsh Jindal]

Mr. Saurabh, service receiver have to pay the tax on reverse charge basis except some cases. There is no issue regarding threshold limit of service provider.

[sanjay bulakh]

“The liability of the service provider and service recipient are different and independent of each other. Thus, in case the service provider is availing exemption owing to turnover being less than Rs 10 lakhs, he shall not be obliged to pay any tax. However, the service recipient shall have to pay service tax which he is required to pay under the partial reverse charge mechanism.”

Sanjay Bulakh

email- [email protected]

AI Summary

Service receiver must pay service tax under reverse charge even if provider's turnover is below 10 lakhs exemption. A discussion on a forum addresses the issue of service tax payment when the service provider is exempted due to a turnover below 10 lakhs. Despite this exemption, the service receiver must still pay service tax under the reverse charge mechanism. Replies clarify that if the provider is exempt, the receiver has no liability unless specified under certain conditions like providing services to a body corporate. The service provider and recipient have independent tax liabilities, and the recipient must pay tax as required under the reverse charge mechanism, regardless of the provider's exemption status.