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TMI BlogPerson Liable to Pay Service TaxX X X X Extracts X X X X X X X X Extracts X X X X ..... if he is the person liable for paying the service tax in relation to such service. . (Reverse Charge) Further it states that the Central Government may notify the service and the extent of service tax which shall be payable by such person and the provisions of this Chapter 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. (Partial Reverse Charge) Accordingly the Central Government has first time issued a notification exercising the powers under section 68(2 ) no. 36/2004 ST dated 31/12/2004 , specifying the services for which the prescribed person under rule 2(1)(d) shall be liable to pay service tax. This notification is now superseded by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions. For an example, a transporter cannot pay service tax on the consignment where the consignee or consignor is liable to pay service tax under the above provisions. Text of CBEC s Educational Guide on Partial Reverse Charge 10.1 Partial Reverse Charge With effect from 1.7.2012 a new scheme of taxation is being brought into effect whereby the liability of payment of service tax shall be both on the service provider and the service recipient. Usually such liability is affixed either on the service provider or the service recipient, but in specified services and in specified conditions, such liability shall be on both the service provider and the service recipient. The enabling provision has been provided by i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a business entity registered as a body corporate located in the taxable territory. Thus the nature of the service and the status of both the service provider and service receiver are important to determine the applicability of partial reverse charge provisions. 10.1.2 What does a service provider need to indicate on the invoice when he is liable to pay only a part of the liability under the partial reverse charge mechanism? The service provider shall issue an invoice complying with Rule 4A of the Service Tax Rules1994. Thus the invoice shall indicate the name, address and the registration number of the service provider; the name and address of the person receiving taxable service; the description and value of taxable ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t required to calculate his tax liability under partial reverse charge mechanism? How will the service recipient know which abatement or valuation option has been exercised by the service provider? The service recipient would need to discharge liability only on the payments made by him. Thus the assessable value would be calculated on such payments done (Free of Cost material supplied and out of pocket expenses reimbursed or incurred on behalf of the service provider need to be included in the assessable value in terms of Valuation Rules. The invoice raised by the service provider would normally indicate the abatement taken or method of valuation used for arriving at the taxable value. However since the liability of the service provider ..... X X X X Extracts X X X X X X X X Extracts X X X X
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