Liability of service tax payment for service receiver in case of Reverse charge mechnisem under works contract

[Guest]

Dear Team,

Please guide me on Liability of service tax payment for service receiver in case of Reverse charge mechnisem under works contract;

1. Whether exemption limit of Rs.10 Lacs will be available to service receiver (as a corporate).
2. If above exemption limit is available, how to check monetary limit for exemption?
3. Suppose above exemption limit will not be available than what is the guideline for payment of service tax?

 Any reference of section, notification, and guideline would be helpful for me.

[JAMES PG]

1. Whether exemption limit of  Rs 10 Lacs will be available to service receiver - Not available to the recipient
2. If above exemption limit is available, how to check monetary limit for exemption?- Taxable turnover of the previous financial year /current year shall not exceed Rs 10 lacs
3. Suppose above exemption limit will not be available than what is the guideline for payment of service tax?. On fifty % of the value, ST needs to be paid subject to the valuation Rules as per Not 24/2012 dated 6th June,12

[Guest]

 

Dear  sir,

Thanks for your valuable guidance.

It means as a service receiver we have to deposit service tax on works contract so:-

 Is any service tax registration required for this because we are manufacturering co. .

Some amount of service tax has already paid by us to the contractor after 01-07-12 for WO issued after 01-07-12. Because they had charged full amount of service tax  in their invoices. Now what is remedy available for this & what is our responsibility for already paid service tax?

 

[JAMES PG]

For payment of Service Tax under reverse charge, you have to get registered with Service Tax Dept.

It is better to pay Service Tax as per the joint liability cast upon by you under Section 66B of the Finance Act. Even if the service provider has paid 12.36%, Dept may raise a demand on you. Hence recover the excess amount of ST paid from the service provider and discharge your liability

[Harsh Jindal]

Dear Kumar,

1. No exemption is avialable for service rceiver under RCM.

2. Refer to Point No. 1

3. You have to get registered under Service Tax Dept. and pay the tax as per the valuation rules.

AI Summary

Reverse charge liability: recipient not eligible for small-turnover exemption; must register and pay tax under valuation rules. Under the Reverse Charge Mechanism for works contracts the service receiver is liable to pay service tax, is not eligible for the Rs.10 Lacs small-turnover exemption, must register for service tax, and must pay tax on the prescribed portion of contract value under the valuation rules and related notifications.