CA Sandeep Kanoi

CA Sandeep KanoiReverse 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 and Notification No.7/2015-Service Tax, Dated- 1st March, 2015.

After Considering all these Notifications We have Compiled The Reverse and Partial Reverse Mechanism Chart as Applicable from 01.04.2015-

Reverse and Partial Reverse Mechanism Chart with effect from 01.04.2015  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 

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
(1) (2) (3) (4)
1 in respect of services provided or agreed to be provided by an insurance agent to any person carrying on insurance business Nil 100%
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%
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) Nil 100%
1C. in respect of service provided or agreed to be provided by a selling or marketing agent of lottery tickets to a lottery distributor or selling agent Nil 100%
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%
3 in respect of services provided or agreed to be provided by way of sponsorship to anybody corporate or partnership firm Nil 100%
4 in respect of services provided or agreed to be provided by an arbitral tribunal to any Business entity Nil 100%
5 in respect of services provided or agreed to be provided by individual advocate or a firm of advocates by way of legal services to any Business entity Nil 100%
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%
6 in respect of services provided or agreed to be provided by Government or local authority 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 to any Business Entity Nil 100%
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%
(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%
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%
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 50% 50%
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%
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%

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.

Explanation-III. Hitherto, support services provided by a Government/Local authority to any  business entity was subject to 100% reverse charge. The scope of reverse charge has now been  extended in case of all services provided by the Government/Local authority to such business  entities. The exclusion from reverse charge on renting of immovable property and some specified services of Sec. 66D of the Act shall continue.

Also Read-

Service Tax Abatement Rate Chart from 01.04.2015

Updated Negative List of Services under Service Tax from 01.04.2015

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Qualification: CA in Practice
Company: Taxguru / Sandeep Kanoi & Associates
Location: Mumbai, Maharashtra, IN
Member Since: 27 Feb 2017 | Total Posts: 599
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48 responses to “Reverse and Partial Reverse Mechanism Chart from 01.04.2015”

  1. Trinadh Rao Kintali says:

    Transport Charges /GTA service on which you have spend Rs.49,616/-, Professional/Technical charges of Rs.7,36,559/- and Miscellaneous expenses towards taxable services received by you of Rs.3,51,226/- during the period for 2014-15 and Miscellaneous expenses towards taxable services received by you of Rs.10,22,940/- during the period for 2015-16 on which service tax is payable under reverse charge mechanism vide Notification no. 30/2012-ST dated 20.06.2012 as amended. The service tax liability on the above expenditures is of Rs.1,40,583/- and Rs.1,48,326/- respectively. Therefore you are requested to pay the same alongwith interest as per appllicable rates as well as penalty of Rs.43,336/- @15%

  2. maya says:

    sir
    i m service provider of manpower housekeeping services , i m having sale of 60000 pm only.
    only 2 site in hand .
    GST is payable by service receiver.
    should i apply for GST no. ??
    regards
    maya

  3. mohit says:

    Dear Sir I am in confusion on one issue that

    I am a indivisual and i give commision to many persons for selling my products ( Sales on Commision), then is there any service tax liability arise and on which person it arises. Is their any threshold limit for it .

    One more question if i starts Multi Level Marketing Firm then what is the service tax liability on commission given to my members.

  4. RAVI ANJARA says:

    Sir,

    We have taken hiring vehicle service via tender. Service provider (individual) has ST Code and turn over>10 lac. He has issued an invoice (Claiming 50% ST liability on his part) as under:-

    Base Amt = 18000
    ST 7% = 1260
    SBC 0.25% = 45
    ________________
    Total Rs. = 19305/-

    Now do we need to pay 50% Service Tax to ST Authority after payment of this bill ?
    How much ST, the service provider will have to pay ?

    • guru says:

      Hi,
      Please specify the nature of your organisation(company,firm, indivisual,HUF,AOP)
      assuming that your organisation is a company, then you are supposed to pay the balance 50% i.e 7.25% after the payment of the bill, the service provider will remit 1305(1260+45) to the service tax department . further if the service provider is availing the abatement then the liability to pay service tax falls on the service receiver(you).

  5. RAMANA says:

    Private company providing work contract services to diffrent body corporatares ie govt and private. How much percentage of service tax has to pay by the Copany ie service privder and the opposite perty ie servce resipiant.

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