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
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. (AI Summary)
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