Applicability of Service Tax.

[Vikas Aggarwal]

Dear Sir,

I have a doubt in following cases, it is requested you please solve my query.

1. Service tax applicability on Sub contractor. A plumber (sub contractor, he is an individual) provide service to contractor and raised bill of Rs. 20 lakh, whether he is liable to pay service tax if not who is liable to pay.

2. Computer AMC services provided by an individual service provider to Company and charged Rs. 20000/- PM, The above AMC includes only labour portion (for any material they raised separate bill), in this situation company can liable to pay Service tax on AMC amount of Rs. 20000/- under reverse Charges.

3. Job work/AMC/Repair & Maintenance work without use of material (means only labour portion) covered under defination of Work Contract, if not than the above service are liable for service tax.

4.  Under reverse charge the POT Rule was date of payment when payment made within 6 month, otherwise date of issue of invoice, if a service provider issued bill on August end & the service recipient (company) not pay the bill within 6 month, what is the POT under this situation. If company file service tax return for the period April to Sept. without considered august bill. Can company revised service tax return.



With Best regards,
CA VIKAS AGGARWAL
+91-8800549233

[YAGAY andSUN]

Reply to Point No. 1

Please refer para 7.11.10 (H) of the Service Tax Educational Guide which state 'sub-contractor providing services by way of works contract to another contractor providing works contract services which are exempt; If the services falls under this category, then it will be exempted otherwise service tax will be applicable.

Reply to Point No. 2

Individual may not be liable to pay service tax due to threshold limit.  But if the recipient is company then they would have to pay the service tax under partial reverse charge mode provided material involved in this transaction.

Reply to Point No.3

Yes, if such service does not fall under the category of partial reverse charge mechanism, then service provider will charge the service tax while raising the bills provided crossing up the threshold limit held.

 

 

[Vikas Aggarwal]

Very very thanks Mr. Pradeep Khatri for your suggetion.

Sir i have doubt in reverse charge that if service receipant not liable to pay service tax under reverse charge regim & service provider is an individual.

Than in case of work contract he is liable to pay service tax on full value of bill raised or only 50% portion.

 

Regards,

Vikas Aggarwal

[YAGAY andSUN]

There is no exemption to service recipient in PRCM.  If the service provider is individual and he is under threshold limit even then, service recipient is liable to pay the service tax on 50% amount of the services provided.

[Gautam Vadher]

Sir,

I have higher AMC for Computer Repairing , Can Service TAX Applicable on this Service?

Gautam

AI Summary

Reverse charge on services requires the service recipient to discharge tax when the provider is an individual under threshold. Subcontractors performing works contract services may be exempt if the principal contract service is exempt; otherwise service tax applies. Under the partial reverse charge mechanism the service recipient must discharge tax where the individual provider is below threshold and materials are involved, and timing under Point of Taxation rules depends on payment within the prescribed period or else the invoice date.