list of services on which 25 % & 75% is to be charged, Service Tax

[rohit rao]

Dear Sir,

I require a list which can mention on which services we have to pay 25 % of the ST and on which 75 % of  ST is to be paid.

We are pvt ltd manufacturing company at nagpur, recently We have received a bill from a manpower supply Company. In his bill he has charged us 12.36 % ST on the full amount i:e he has charges 1236 on rs 10000. now the problem is that if the manpower suppler has to pay 25 % of  ST ie 309 then how can he charged full ST of 12.36% on us. Now Our a/c dept is confussed whether to pay him full amount or shall deduct 75% of the ST amount from his total bill and pay him.

We have told the Manpower supplier about the changes in the ST from July but he is not listening and say he wil charge the full ST and no deduction should be made in his bill.

I kindly request you to suggest us or if possible send me a list in which it is clearly mentioned on which Service we have to pay 25 % and on which we have to pay 75%.

We are also have security at our premise and the security company charging us ST 12.36% on the total bill, in this case what will be the ratio of ST % that we have to pay.

Kindly guide us on the above matter.

Regards

Rohit R Rao

Posts / Replies

[Seetharaman K C]

Please look at notification no 30/2012, dated 20-06-2012 wherein the reverse charge percentages are clearly specified therein. If you look at serial no 8 it specifies the percentage of total service tax to be paid by the service provider and the percentage of the total service tax to be paid by the service receiver. In the case of manpower supply the service provider needs to pay 25% of the service tax payable and the service receiver needs to pay 75% of the service tax payable. The service provider can bill only the 25% service tax which is to be paid by him.It would be in order if you could take a print out of notification no 30/2012, dated 20-06-2012 and handover a copy to your manpower supplier so the doubt is clarified. 

 

[Seetharaman K C]

Further to my explanation which I had given earlier it is pertinient to note that the supply of manpower for any purpose or security services by any individual, Hindu Undivided Family or partnership firm, whether registered or not, including association of persons, located in the taxable territory to a business entity registered as body corporate, located in the taxable territory would be covered under this notification and would be eligible for the 25%:75% service tax liability between the service provider : service receiver, and in other cases the payment of service tax would have to be done in full by the service provider. Hence you would need to look into the constitution of the service provider and the service receiver also before taking shelter under notification 30/2012.

[rohit rao]

Dear Sir,

 

Thanks for quick reply and your suggetion.  

 

Regards

 

Rohit R Rao

[rohit rao]

Dear Sir,

In case of recruitment agencies it would be still 25% and 75 % ratio and if there Security Service company which is providing its service is a Pvt Ltd what will be the Percentage of service tax and who will pay the Service Tax ie we the Service Provider or the Service Reciver.

[Seetharaman K C]

Both in the case of manpower supply for any purpose  or in the case of  security services the percentage of 25% : 75% between the service provider and service receiver would apply subject to the fulfillment of other conditions as specified in Notification no 30/2012 dated 20-06-2012

[RAJESH MANGAL AGRAWAL]

Mr Rohit,

Pl refer the earlier reply by Mr Seetharaman K C, where he has mentioned that

" the supply of manpower for any purpose or security services by any individual, Hindu Undivided Family or partnership firm, whether registered or not, including association of persons, located in the taxable territory to a business entity registered as body corporate, located in the taxable territory would be covered under this notification no. 30/2012, and would be eligible for the 25%:75% service tax liability between the service provider : service receiver, and in other cases the payment of service tax would have to be done in full by the service provider."

Here u have mentioned that the security service provider is a Pvt. Ltd. Co. Here U do not fall under the ambit of Notification No. 30/2012 as a recipient of security service. Hence U r not liable to pay any service tax on Reverse charge mechanism as a recipient of Security Service. Your service provider (PVT. Ltd. Co.) has to charge full rate of service tax of 12.36% from u & it is it's liability to deposit the tax in the Exchequers account.

CA Rajesh Mangal Agrawal.

[JAMES PG]

As clarified by CA Rajesh Mangal Agrawal, joint liability and partial liability under RCM will not be applicable for the services rendered by Ltd Cos