CA Sandeep Kanoi
Reverse Mechanism and Partial Reverse Mechanism in Service Tax was First Introduced Vide Principal Notification No. 30/2012-Service Tax Dated- 20th June, 2012 and subsequently been amended vide Corrigendum Notification [F. No.334/1/2012 -TRU], dated 29-6-2012, Notification No. 45/2012-Service Tax, dated 7th August, 2012 , Notification No. 10/2014-Service Tax Dated- 11th July, 2014, Notification No.7/2015-Service Tax, Dated- 1st March, 2015 and Notification No. 18/2016-Service Tax Dated : 01/06/2016
After Considering all these Notifications We have Compiled The Reverse and Partial Reverse Mechanism Chart as Applicable from 01.06.2016
Reverse and Partial Reverse Mechanism Rate Chart with effect from 01.06.2016 and The extent of service tax payable thereon by the person who provides the service and any other person liable for paying service tax for the taxable services. List been compiled after considering Amendments made by Budget 2016, Swachh Bharat & Krishi Kalyan Cess
Table
| Sl. No. | Description of a service | Percentage of service tax payable by the person providing service | Percentage of service tax payable by any person liable for paying service tax other than the service provider | Tax Payable | |
| Service Provider | Service Receiver | ||||
| (1) | (2) | (3) | (4) | (5) | (6) |
| 1 | in respect of services provided or agreed to be provided by an insurance agent to any person carrying on insurance business | Nil | 100% | Nil | 15% |
| 1A | in respect of services provided or agreed to be provided by a recovery agent to a banking company or a financial institution or a non-banking financial company (Effective from 01.04.2015) | Nil | 100% | Nil | 15% |
| 1B. | in respect of services provided or agreed to be provided by a mutual fund agent or distributor, to a mutual fund or asset management company (Effective from 01.04.2015)
Omitted vide Notification No. 18/2016-ST dated 01.03.2016 wef 01.04.2016 |
NOT APPLICABLE |
|||
| 1C. | in respect of services provided or agreed to be provided by a selling or marketing agent of lottery tickets in relation to lottery in any manner to a lottery distributor or selling agent of the State Government under the provisions of the Lottery (Regulations) Act, 1998 (17 of 1998)
(inserted vide Notification No.7/2015-Service Tax, Dated- 1st March, 2015WEF 01.04.2016 ) |
Nil | 100% | Nil | 15% |
| 2 | in respect of services provided or agreed to be provided by a goods transport agency in respect of transportation of goods by road to Company, Partnership Firm, Registered Factory, Registered Society, co-operative society, AOP, LLP, Person Registered Under Central Excise Act, 1944 including Excise Dealers | Nil | 100% | Nil | 15% |
| 3 | in respect of services provided or agreed to be provided by way of sponsorship to anybody corporate or partnership firm | Nil | 100% | Nil | 15% |
| 4 | in respect of services provided or agreed to be provided by an arbitral tribunal to any Business entity | Nil | 100% | Nil | 15% |
| 5 | in respect of services provided or agreed to be provided by a firm of advocates or an individual advocate other than a senior advocate by way of legal services
(substituted vide Notification No. 18/2016-ST dated 01.03.2016 wef 01.04.2016)) |
Nil | 100% | Nil | 15% |
| 5A | in respect of services provided or agreed to be provided by a director of a company or a body corporate to the said company or the body corporate | Nil | 100% | Nil | 15% |
| 6 | in respect of services provided or agreed to be provided by Government or local authority [OMITTED – by way of support services] excluding,- (1) renting of immovable property, and (2) services specified in sub-clauses (i), (ii) and (iii) of clause (a) of section 66D of the Finance Act,1994
(the words “by way of support services” has been omitted vide Notification No. 18/2016-ST dated 01.03.2016 wef 01.04.2016) |
Nil | 100% | Nil | 15% |
| 7 | (a) in respect of services provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers on abated value to any person who is not engaged in the similar line of business by individual, HUF, firm or AOP to Body Corporate | Nil | 100% | Nil | After availment of 60% abatement:
6% |
| (b) in respect of services provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers on non abated value to any person who is not engaged in the similar line of business by individual, HUF, firm or AOP to Body Corporate (Revised wef 01.10.2014) | 50% | 50% | Without availment of 60% abatement:
7.50 % |
Without availment of 60% abatement:
7.50% |
|
| 8. | in respect of services provided or agreed to be provided by way of supply of manpower for any purpose or security services by individual, HUF, firm or AOP to Body Corporate | Nil | 100% | Nil | 15% |
| 9. | in respect of services provided or agreed to be provided in service portion in execution of works contract by individual, HUF, firm or AOP to Body Corporate | ||||
| In case of Original work | 50% | 50% | After availment of 60% abatement
3% |
After availment of 60% abatement
3% |
|
| In all other cases | 50% | 50% | After availment of 30% abatement:
5.25% |
After availment of 30% abatement:
5.25% |
|
| 10 | in respect of 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 | Nil | 100% | Nil | 15% |
| 11. | in respect of any service provided or agreed to be provided by a person involving an aggregator in any manner to any Business Entity(Effective from 01.03.2015) | Nil | 100% | Nil | 15% |
Explanation-I. – The person who pays or is liable to pay freight for the transportation of goods by road in goods carriage, located in the taxable territory shall be treated as the person who receives the service for the purpose of this notification.
Explanation-II. – In works contract services, where both service provider and service recipient is the persons liable to pay tax, the service recipient has the option of choosing the valuation method as per choice, independent of valuation method adopted by the provider of service.
Author Bio
Very useful Sir. Thanks.
Dear Sir,
We have pay foreign remittance (legal charges) and ded tds but can u confirm service tax reverse chrg is applicable or not
If a legal firm charges Rs.20000 for for providing service claiming that the price is including all statutory taxes.
What will be the service tax under reverse tax mechanism.
Is their any reverse Charge mechanism on AMC Charges?
Dont we have abatement in Reverse mechanism Charge for Goods Transport agency?
sir
please send the service tax reverse charge mechanism as per the latest details
regards
varadharajan
Dear Sir,
we are received the transportation service for goods, as we are the company we have paid the service tax on same under RCM to Govt. for the same we are eligible for getting ST return, can we debit same amount to our Transporter he is individual.
These days entities in India are arranging services from an entity outside India and providing those services un-modified/ modified to another entity outside India.
In such cases, does the Indian entity have to pay service tax under “Reverse Charge Mechanism” (RCM) first? and then claim reimbursement on export of services?
In my opinion, the whole chain of transaction is exempt as the services were not consumed in India. Any payment of tax under RCM and claiming refund is not required.
Please inform your opinion. Thanks!