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Reverse Charge in Service Tax

Posted @ December 28, 2012, 1:02 am under (Service Tax Updates)

REVERSE CHARGE IN SERVICE TAX

Under   Reverse Charge Service Tax is payable by the recipient instead of provider. Under this scheme service receiver has to register   himself. He can’t claim general exemption limit of Rs. 10 lakh .Every   register person have to file half yearly return. Nil return is also mandatory. In case of Reverse charge   mechanism   point of taxation   is Date of Payment to service provider

Chart   of   Reverse   Charge in Service Tax

Sl   no.

Description of a service

Percentage of  service tax payable by the person providing service

Percentage of service tax payable by the person receiving the service

 

  1.  

services  provided or agreed to be provided  by an insurance agent to any person carrying on insurance business

Nil

100%

  1.  

services  provided or agreed to be provided  by a goods transport agency in respect of transportation  of goods by road

Nil

100%

  1.  

services  provided or agreed to be provided  by way of sponsorship

Nil

100%

  1.  

services  provided or agreed to be provided  by an arbitral tribunal

Nil

100%

  1.  

services  provided or agreed to be provided  by individual advocate

Nil

100%

  1.  

services  provided or agreed to be provided  by way of support service by Government or local authority

Nil

100%

  1.  

(a)   in respect of  services  provided or agreed to be provided  by way of renting or hiring any motor vehicle designed to carry passenger on abated value.

(b)   in respect of  services  provided or agreed to be provided  by way of renting or hiring any motor vehicle designed to carry passenger on non abated value.

Nil

 

 

 

 

 

 

60%

100%

 

 

 

 

 

 

40%

  1.  

services  provided or agreed to be provided  by way of supply of manpower or Security services(inserted in notification 45-46 dated 07/08/2012)  for any purpose

25%

75%

  1.  

services  provided or agreed to be provided  by way of works contract

50%

50%

  1.  

any taxable services  provided or agreed to be provided  by any person who is located in a non-taxable territory and received by any person located in the taxable territory(IMPORT OF SERVICES)

Nil

 

100%

 

 

 

  1.  

provided or agreed to be provided by a director of a company to the said company
(Inserted through notification 46-47/2012 dated 07/08/2012)

 

Nil

 

100%

 

 

Reverse Charge scheme is applicable if service receiver /service provider satisfy following condition:

               

Sl. No.

Description of a service

SERVICE PROVIDER

SERVICE RECIVER

  1.  

services  provided by an insurance agent to any person carrying on insurance business

ANY

ANY

  1.  

services  provided or agreed to be   provided  by a goods transport agency in respect   of transportation  of goods by road

where the consignor or the consignee  is,—
(a)  any factory registered under or governed by the Factories Act, 1948 (63 of 1948);
(b)  any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India;
(c)  any co-operative society established by or under any law;
(d)  any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made there under;
(e)  anybody corporate established, by or under any law; or
(f)  any partnership firm whether registered or not under any law including association of persons;

  1.  

services  provided or agreed to be   provided  by way of sponsorship

any

body corporate/partnership firm

  1.  

services  provided or agreed to be   provided  by an arbitral tribunal

Arbitral tribunal

Business entity with a turnover more than rupees ten lakh in the preceding financial year;

  1.  

Legal Services provided by advocate  (whether individual or firm) to any business entity  

Individual or firm

Business entity with a turnover more than rupees ten lakh in the preceding financial year;

  1.  

services  provided or agreed to be   provided  by way of support service by Government or local authority

Government /Local authority

Business entity

  1.  

(a)   services  provided or agreed to be provided  by way of renting or hiring any motor vehicle designed to carry passenger on abated value. (b) services  provided or agreed to be provided  by way of renting or hiring any motor vehicle designed to carry passenger on non abated value.

Individual (prop ) /Partnership firm (registered or unregistered)           /HUF

any company formed or registered under the Companies Act, 1956 (1 of  1956) or a business entity registered as body corporate located in the taxable territory;

  1.  

services  provided or agreed to be   provided  by way of works contract

  1.  

any taxable services  provided or agreed to be provided  by any person who is located in a non-taxable territory and received by any person located in the taxable territory

any

any

  1.  

provided or agreed to be provided by a director of a company to the said company

 

Director (individual)

Company

Following additional services shall be covered in Reverse Charge mechanism w. e. f.  07.08.12

Sl. No.

Nature or Description of
service

% of Service Tax payable by service provider

% of Service Tax payable by service Recipient

1.

Security Services provided by Individual, HUF, partnership firm or AOP to body corporate business entity

[Security services" means services relating to the security of any property, whether movable or immovable, or of any person, in any manner and includes the services of investigation, detection or verification, of any fact or activity- Rule 2(fa) of Service Tax Rules, 1994]

 

 

25%

75%

2.

Services  by a director of a company to the said company

Nil

100%

 


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