Liability of S.T. under RCM, Service Tax

[Sanjeev Chauhan]

Sir,

Under Partial Reverse Charge Mechanism Service recipient of security services is required to pay S.T. on 75%  value.

Suppose the service provider has discharge the 100% tax liability, then whether the service recipient is still liable to pay s.t. on 75% value or otherwise.

Thanks in advance

 

Posts / Replies

[Pradeep Khatri]

There is no exemption available to service recipient.  Even in the case of service tax liability has been paid by the service provider after collecting the full amount of tax from the service recipient.

Service recipient has to pay his share to the extent of  12.36% on the 75% of the taxable amount.  However, service provider or service recipient can seek the refund of excess paid service tax from the service tax department under Section 11B of the Central Excise Act, 1944.

[Krishan Gopal]

Dear Sanjeev,

If servcie provider is not a company than you would have to pay service tax (75%) under RCM

K.Gopal

[MANDAVILLI RAMAKRISHNA]

this is technical mistake. take invoice for 100 percent ST from the service provider and release payment to him for entire 100 percent ST. then  you can take input claim which can be adjusted towards your liability. it is not a mistake to pay more ST than required amount. 

but as per RCM, service recipient has to pay 75 percent of ST. so inevitably pay the balance also.

or

ask the service provider to adjust the extra amount paid towards his liability of other contracts and not to charge your company for the excess paid.