Reverse Charge

[sampath Gopalakrishnan]

With respect to recent amendments to service tax laws, especially reverse charge mechanism in case of manpower supply, what will be the liability of the service recevier if the service provider's total turnover is less than 10 lakhs in the previous year i.e. there is no service tax liability from him

[YAGAY andSUN]

No, Service Recipient can't take the benefit of Threshold limit.  They has to pay the Service Tax on reverse charge mechanism at any cost.

[YAGAY andSUN]

Please check the para 10.1.3 of the "Taxation of Service :- An Educational Guide" published on 20-06-2012.

AI Summary

Reverse charge: service recipient remains liable for service tax on manpower supply even if provider lacks tax liability. Reverse charge liability for manpower supply services requires the service recipient to discharge service tax under the reverse charge mechanism regardless of the service provider's exemption from registration or tax on account of a turnover threshold; the recipient's obligation is independent of the provider's turnover-based threshold relief.