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Reverse Charge under Service Tax (updated 31st Oct, 2014)

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Reverse Charge 
under Service Tax 
CA. DHRUV SETH 
DS@SETHSPRO.COM 
31ST OCTOBER, 2014

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Legislative competence 
Sec 68(2) of the Finance Act, 
1994 
Notification 30/2012 as 
amended till date

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RCM Services - Import 
Type of Service Service 
Recipient 
% payable by 
Provider 
% payable 
by Receiver 
Provided from n...

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Reverse Charge under Service Tax (updated 31st Oct, 2014)

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Implications and Applicability of Reverse Charge under the provisions of Service Tax.

Implications and Applicability of Reverse Charge under the provisions of Service Tax.

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Reverse Charge under Service Tax (updated 31st Oct, 2014)

  1. 1. Reverse Charge under Service Tax CA. DHRUV SETH DS@SETHSPRO.COM 31ST OCTOBER, 2014
  2. 2. Legislative competence Sec 68(2) of the Finance Act, 1994 Notification 30/2012 as amended till date
  3. 3. RCM Services - Import Type of Service Service Recipient % payable by Provider % payable by Receiver Provided from non taxable territory to taxable territory Any Person Nil 100% Note : -  Non Taxable territory also includes Jammu & Kashmir.  To be read in conjunction with Place of Provision Rules to determine the location of service.
  4. 4. RCM Services – Recovery Agent Type of Service Service Recipient % payable by Provider % payable by Receiver By a Recovery Agent Banking Company, NBFC, Financial Institutions Nil 100% Note : -  Only “Recovery” services covered under reverse charge and not “Collection” services.
  5. 5. RCM Services – Works Contract Type of Service Service Recipient % payable by Provider % payable by Receiver WCT by a Individual, HUF, Firm or AOP Body Corporate 50% 50% Note : -  Works contract as defined in Sec 65B of the finance act, 1994.  After abatement of 60% effective rate to be 2.472% on recipient and provider for original works.
  6. 6. RCM Services – Manpower Type of Service Service Recipient % payable by Provider % payable by Receiver Manpower supply by a Individual, HUF, Firm or AOP Body Corporate 25% 75% Note : -  Manpower supply includes Security services also.  Manpower supply would mean pure supply of manpower with no supervision or control over the manpower by the provider.
  7. 7. RCM Services – Renting Vehicle Type of Service Service Recipient % payable by Provider % payable by Receiver a Individual, HUF, Firm or AOP not in similar line Body Corporate Nil (with abatement) 50% (without) abatement 100% (with abatement) 50% (without) abatement Note : -  Applies only in case it has been provided not in the same line of business. Such as vehicle renting to a construction company
  8. 8. RCM Services – Government Type of Service Service Recipient % payable by Provider % payable by Receiver Government or Local Authority Business Entity Nil 100% Note : -  Any “Support” service by the government for which a consideration is charged by them.  To a “Business entity” not a “body corporate” so individuals, HUF etc. also covered under RC.
  9. 9. RCM Services – Director Type of Service Service Recipient % payable by Provider % payable by Receiver Director Body Corporate Nil 100% Note : -  Only non executive directors covered.  Any amount paid to them is to be subject to service tax under reverse charge by the company.
  10. 10. RCM Services – Advocate Type of Service Service Recipient % payable by Provider % payable by Receiver Legal Services Business Entity Nil 100% Note : -  Only Legal services (under any law) by Individual advocates under the ambit of reverse charge.  To a “Business entity” not a “body corporate” so individuals, HUF etc. also covered under RC.
  11. 11. RCM Services – Sponsorship Type of Service Service Recipient % payable by Provider % payable by Receiver Any sponsorship Body Corporate or a Firm Nil 100% Note : -  Sponsorship of sporting events excluded.  To a body corporate or a partnership firm.
  12. 12. RCM Services – Goods Transport Type of Service Service Recipient % payable by Provider % payable by Receiver Good transport services by road Company, Firm, Factory, Society, Excise Nil 100% Note : -  Service recipient is the person who pays or is liable to pay the freight.
  13. 13. Common Problems Challan Code Registration CENVAT Payable date
  14. 14. “ ” Thank You CA. DHRUV SETH DS@SETHSPRO.COM

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