Reverse charge mechanism

[palaniappan thirukalathiappan]

Dear Experts,

I wish to know in reverse charge mechanisam, what is the %age of service tax payment to be done by SP & SR if SP & SR both are Pvt. Ltd organisations.

[YAGAY andSUN]

In this scenario, service provider will charge the service tax 100%, collect from service recipient and deposit into the Government's account.

[Ashwani Rustagi]

If the Service Provider is pvt. ltd. company than there is no service tax liability on SR under reverse charge mechanism.

[NK SHETE]

I do agree with the views of two experts.

[Ankur Agrawal]

for applicability for reverse charge mechanisam on supply of manpower, security services & renting and hiring of vehicles following two condion must be satisfied:

1. Service provider -: he must be individual, huf, parternship firm (registered/unregistered)

2. Service Receiver -: company registered under companies act.

AI Summary

Debate on Reverse Charge Mechanism: Who Pays Service Tax - Provider or Recipient? Key Conditions Explained. A discussion on the reverse charge mechanism in service tax involves queries about the percentage of tax payment responsibilities between service providers (SP) and service recipients (SR) when both are private limited companies. One expert states that the service provider charges and collects 100% of the service tax. Another asserts that there is no service tax liability on the service recipient under the reverse charge mechanism if the service provider is a private limited company. An additional reply emphasizes that certain conditions must be met for the reverse charge to apply, specifically regarding the types of services and the nature of the service provider and recipient.