Liability to deposit Service Tax for reverse charge

[Ashok Chopra]

Respected Forum,

 

Service provider  X Company and supplying man power to Y  Company. X company will charge how much service tax, whether 25% or 100%.  Is in this case liability of 75% service tax under  reverse charge will not be on receipant and 100% service tax will be paid by Service Provider.  also let me know the notification number.

regards  

[YAGAY and SUN]

If the service provider is a body corporate then revese charge won't be applicable.  The service provider will charge 100% Service Tax in it's bill/invoice to the service recipiant

[RAJESH MANGAL AGRAWAL]

Pl.refer the serial No. (v) of I (A) of Notification No. 30/2012-Service Tax dated 20th Jun 2012.

Here the pre condition is the  service provider should be an Individual,HUF or Partnership Firm, whether registered or not, including (AOP) Association of persons, located in the taxable teritory AND  the service receiver should be a business entity registered as a Body Corporate, located in the taxable territory.

Hence in your case the service provider will charge 100% service tax to U and the tax payment liability also rest on it.

AI Summary

Reverse charge on service tax: supplier corporate status determines liability-corporate provider charges and pays full service tax. Liability under the reverse charge depends on supplier status: if the manpower supplier is a body corporate, reverse charge does not apply and the supplier must charge and pay the full service tax. Reverse charge applies only where the supplier is an individual, HUF, partnership firm or association of persons located in the taxable territory and the recipient is a body corporate in the taxable territory.