Service tax on reverse charge mechanism


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Finance Act, 2012 has introduce many services under reverse charge mechanism. Overview of the same has been given in document.

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Service tax on reverse charge mechanism

  1. 1. Service Tax on Reverse charge mechanism – applicable from 1st July, 20121The Central Government has notified the following taxable services and the extent of service tax payableby the person who receives the service and the person who provides the service:Sr. Taxable Service Provided by Provided to Percentage of Percentage ofNo. service tax service tax payable by the payable by the person person providing receiving service the service1 services provided nsurance Insurance Person carrying on NIL 100% by an insurance agent insurance business agent2 services provided Goods Consignor or NIL 100% by a goods transport consignee is: transport agency agency • factory, (GTA) in respect of • society, transportation of • co-operative goods by road 2 society, • dealer of excisable goods, • body corporate, • partnership firm3 services provided Any person • body corporate NIL 100% by way of • Partnership firm sponsorship4 services provided Arbitral Any business entity NIL 100% by an arbitral tribunal tribunal5 services provided by Individual Any business entity NIL 100% individual advocate advocate6 services provided by • Government Any business entity NIL 100% way of support • local service by authority Government or local authority1 Notification no. 15/2012-Serivce Tax2 Person who pays or is liable to pay freight either himself or through his agent for the transportation of goods byroad in goods carriage shall be treated as the person who receives the service.
  2. 2. 7 (a) services • Individual • Company NIL 100% provided • HUF • LLP by way of renting or • proprietary hiring any motor firm vehicle • partnership designed to carry firm passenger • AOP on abated value. (b) in respect of 60% 40% services provided by way of renting or hiring any motor vehicle designed to carry passenger on non abated value.8 services provided by • Individual • Company 25% 75% way of supply of • HUF • LLP manpower for any • proprietary purpose firm • partnership firm • AOP9 services provided • Individual • Company 50% 50% by way of works • HUF • LLP contract • proprietary firm • partnership firm • AOP10 taxable services Any person Any NIL 100% provided by located in a person located in any person who is nontaxable the taxable territory located in a nontaxable territory territory and received by any person located in the taxable territory