Reverse Charge Machenism

[Mridul Sethi]

Sir,

Pls let me know, if by  mistake service provider charges full service tax in his bill(means pays our liability also) under reverse charge machenism, then our liablity occurs or not, also pls provide its supporting notification/ circular.

Mridul Sethi

[YAGAY and SUN]

If service provider, mistakenly, charges the entire service tax from the service recipient then please don't pay the service tax fully.  Pay only the partial charges which the service provider is liable to pay and you should pay your share under reverse charge mechanism.

In Law and tax matters, you can not provide supporting and notification for each and every matter but most of the issues get clarified while discussing the same.

AI Summary

Reverse charge mechanism: recipient must not pay supplier's statutory tax portion and should pay only its attributable share.
Reverse charge mechanism requires splitting service tax liability between provider and recipient. If a supplier mistakenly charges the entire tax to the recipient, the recipient should not pay the supplier's statutory portion and must pay only the tax legally attributable to the recipient under the reverse charge mechanism, while obtaining authoritative clarification where needed.