Security Service under reverse charge mechanism

[Pradeep Kaushik]

Dear Sir/s,

security service was included under reverse charge mechanism.

But, if the security service is being provided by a pvt. Ltd. Co.  to an another Pvt. Ltd. Co., then who is liable to deposit the service tax, Service Provider or Service Receipent.

If, service receipent is liable to deposit the Service Tax, what will be the Point of Taxation and Rate.

Please clarify.

Best Regards.

Pradeep Kaushik

[vasudevan unnikrishnan]

Reverse charge mechanism is not applicable in the instant case.RCM is applicable only when the service provoder is an individual,partnership -not a body corporate-and the service receiver is a body corporate like the pvt limited co,here.The entire tax has to be paid by the provider and the receiver can avail cenvat for same as well.

unnikrishnan.v.

[email protected]

[YAGAY and SUN]

Since, services were being provided by the Pvt. ltd. company, therefore, the service provider will be liable to charge and pay the tax amount.  In this scenario, service recipient would not be liable to pay the tax under reverse charge mechanism.

[Vijay kumar]

The liability is on the service provider. The point of taxation for the service provider shall be determined in terms of Rule 3 of PTR, 2011. Accordingly, the POT shall be the earliest of advance received or date of invoice, if raised within 30 days from the date of completion of the service. The rate of service tax shall be the rate prevailing at the time of POT.

[CASeetharaman KC]

The Liability to pay service tax would be on the service provider and Reverse charge mechanism would not apply

AI Summary

Reverse charge applicability: security services by a private company make the provider liable; recipient not liable; POT follows provider rules.
Reverse charge does not apply where security services are supplied by a private limited company to another private limited company; the corporate service provider is liable to collect and pay service tax, the recipient may avail cenvat credit, and the provider's point of taxation is the earliest of advance receipt or the invoice date where invoiced within thirty days of service completion, with the rate prevailing at that point.