payment of service tax on reversed charge method.

[vinay wakde]

As per the Notn No 45/2012-ST dt. 07.08.2012 (Amendment  to Not No 30/12-ST), the service receipient has to pay service tax on reverse charge method on the service given by the Director (100% by the service receipient) and Security service also included in Manpower supply service (75% by the service receipient).

Since, the clarification received on 07.08.2012, whether we have to pay the Interest for delay in payment of Service Tax?

Regards,

VINAY

[Surender Gupta]

 

The amendment is effective w.e.f. 7-8-2012 only and consequently, there  is no question of delay in payment by the recipient of services for the previous period and therefore, no Interest.

[JAMES PG]

SInce the amendment is effective from 7.08.12 and retrospective effect is not mentioned, will there be any liability for the service recipient for the period 1..07.12 to 6.08.12 ?

[YAGAY and SUN]

No way, there would not be any liability of service tax, interest and penalty for the period from 01-07-2012 to 06-08-2012, Since the amendment is prospective, not the retrospective.

[JAMES PG]

Liability to pay ST , Registration, Return filing formalities  etc by Directors of big Corporates have been widely discussed and represented after the  introduction of the levy of ST on fees paid to Directors. The amendment in Notn effective from 7.08.12 is understood to relieve their burden.  Since effect of the Not is prospective, it would imply that they have to tale Regn and pay Tax for the period from 1.07.12 to 6.08.12. Let us hope for another amendment .. !!

AI Summary

Reverse charge on director and manpower services shifts tax liability to the service recipient, relieving prior-period interest exposure.
The amendment makes the service recipient liable under the reverse charge for director fees and for specified manpower services (including security), shifting tax payment to recipients; because the amendment is prospective from its effective date, commentators conclude there is no liability for service tax, interest, or penalty for the prior period when reverse charge was not in effect.