Reverse Charge

[MITSUI PRIME ADVANCED]

Dear Sir,

 

Yesterday Complited our Comm. Audit period form June 2011 to  July 2012.

 

audit Supritendent given suguation that is Reverse chage Service Tax which is applicable form 01.07.2012, Not requeid for Paid in cash, utlized from your Service Tax Credit Balance.

This is right or worng.

but till date not provide any notificaion or circu

 

Please provide your valuable suguation/advice

Regards

 

Arjun Sachdeva

[YAGAY and SUN]

The service recipiet is required to pay service tax under partial reverse charge, in cash i.e. he has to deposit tax by submitting the GAR-7/TR-6 challan to bank or online as the case may be.

Please refer para 10.1.4. of the Taxation of Services:- An Educational Guide, in this regard.

[RadheyShyam Mangal]

The Service recipient cannot utilize the Cenvat Credit for payment of its liability under Reverse Charge basis.

AI Summary

Reverse charge obligation requires service recipients to deposit tax in cash; Cenvat credit cannot be used.
The service recipient under the partial reverse charge regime must pay the service tax liability in cash by depositing tax through prescribed challans (GAR-7/TR-6) at banks or online; the recipient is not permitted to utilize Cenvat credit to discharge the reverse charge liability.