TaxTMI 
TaxTMI 
REVERSE CHARAGE MECHANISM
04 Apr 2013 
3 Replies 
1613 Views Asked by
Agency services taxation: Department of Posts' commission-based bill collection is liable to service tax by negative-list exclusion.
The query asks whether service tax on the post office's commission for collecting telephone bills should be paid by the post office, the telecom provider, or the receiver under Reverse Charge. Replies state government services are generally in the negative list and exempt, but agency services by the Department of Posts on payment of commission for non government business are excluded from the negative list and hence liable to service tax; the text does not expressly resolve who bears tax under Reverse Charge. (AI Summary)
The query asks whether service tax on the post office's commission for collecting telephone bills should be paid by the post office, the telecom provider, or the receiver under Reverse Charge. Replies state government services are generally in the negative list and exempt, but agency services by the Department of Posts on payment of commission for non government business are excluded from the negative list and hence liable to service tax; the text does not expressly resolve who bears tax under Reverse Charge. (AI Summary)
The telecom service provider is collecting telephone bills from the subscribers. In addition to this the postal department is also collecting telephone bills on behalf of the telecom service provider. For this the post office collects Rs.10/- per commission per bill. For this commission service tax is liable to be paid. The doubt is whether such service tax is payable by the post office, the service provider or the telecom service receiver under the Reverse Charge Mechanism. The views of the experts are solicited.