12 - Person Liable to Pay Service Tax

W,e,f, 1-7-2012, a new scheme of taxation introduced in service tax  in which liability of payment of service tax is fixed on both on the service provider and the service recipient. The enabling provision has been provided by insertion of proviso to Section 68 in the Finance Act, 2012 as per which Central Government may notify the service and the extent of service tax which shall be payable by such person and provision of the service tax shall apply to such person to the extent so specified and the remaining part of the service tax shall be paid by the service provider.

 

As per Notification no. 30/2012 dated 20-6-2012 as amended, the following service are covered under partial reverse charge as on 01/04/2015:

1)  In respect of  services  provided or agreed to be provided  by way of renting of a  motor vehicle designed to carry passengers on non abated value to any person who is not engaged in the similar line of business.

2) In respect of  services  provided or agreed to be provided  in service portion in execution  of works contract.

 

Yes. w.e.f. 01/03/2015 vide notification 07/2015- ST dated 1-3-2015, liability to pay service tax may be on the persons other than service provider and service receiver. E.g. in case of aggregator liability to pay service tax is on the any representative of aggregator in case aggregator is not physical available in taxable territory.

 

Partial reverse charge: service tax liability split between provider and recipient; third-party payers allowed under notification A scheme of partial reverse charge allocates service tax between provider and recipient by notifying services and the share payable by the recipient, the provider paying the remainder. As at 01/04/2015 the notification covers renting of passenger motor vehicles to persons not in the same business and the service portion of works contracts. The framework also allows liability to be placed on persons other than provider or recipient, for example a representative of an aggregator, where so notified.