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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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.

  6. VIREN R BHAYANI says:

    sir i want to cleayly ask you that in film making production house can reverse service tax is must can we have to pay reverse service tax when we shoot outdoot like himachal pradesh the whole film where we take service of like.car hire , vehicle hire,vanity hire , spot boy wages paid, location local co-ordinator, setting worker wages, crowd to be call for shoot, wages paid to location cleaning,we take light hire with light man, car hire and wages paid to driver, make up man provided, artist staff , laundry bill , camera hire from mumbai and we paid wages to camera attend ,dress man , also i am saying out of abvoe we have crew memeber contract and agreement , bill etc in the production banner name,

    my question is can in this film making shoot in outdoor we are also payble or provision under the category of reverse service tax,
    next point is we all ready paid service tax amt to whole party those who give bill and charged serv tax then only we came under
    this reverse service tax category this is my confusion hope u clear my mind and reply as early as possible virenrbhayani@gmail.com (mumbai)

  7. sanjay singh says:

    sir
    please tel me how much pecentage service tax paid by us on renting a cab

  8. Akshat Rana says:

    Describe the services with examples please

  9. Siddharath Kumar Singh says:

    also guide under partial reverse charge we charge service tax on invoice

  10. Siddharath Kumar Singh says:

    Sir
    I have a doubt. If I am service provider can we mention service tax @ 14% on invoice in reverse charge mechanism

  11. Yash says:

    Thank ypu sir

  12. Kisansinh Raulji says:

    How meny percent service tax paid on Rent a Cab Service by a service provicer.

  13. Kisansinh Raulji says:

    Dear Sir,

    More clarification required on Rent a Cab service receive, i am working in manufacturing unit, we given contract to travels agency for three shift employee carring from Vadodara to our Work Padra,as per abbetment notification how many percent service tax paid as a service receiver.

    Thanks & regards

  14. yogesh sharma says:

    Dear Sir,

    Please advise about reverse service tax mechanism service provided by professionals like advocates(deposited by client on behalf of advocate). Can we claim (input) after depositing service tax to the govt. authorities?
    Please specified the section of service tax.

  15. Ashok Kumar Sahu says:

    Dear Mr. Sandeep kanoi,

    Very accurate updation of Reverse Mechanism Table.Only one point may be reconfirm that is at sl. no.9 —”works contract by individual, HUF, firm or AOP to Body Corporate ” is AOP OK.

    Thanks in advance.

    SAHU , 9423560517

  16. Raju says:

    Dear sir
    For a goods transport agency service tax to be paid by service receiver as per reverse charge mechanism butin one of our client service tax of 12.36 %is paying by service provider whether it will effect in any way to our client and whether service tax paid by service provider can be claimed as input tax credit.

  17. Nitesh says:

    Dear Sir,

    I would like to get clarified with an example every thing about Rent-a cab service.

  18. Nitesh says:

    Dear sir

    I would like to get clarified on service tax reverse charge mechanism on Cab Operators/ Rent-a-cab service.

    What is the meaning of abated value and non-abated value?

    A proprietor running a business of Cab operators, has to charge service tax on invoice raised by him to person not engaged in similar line of business and to persons engaged in similar line of business.

    Please do reply as early as possible.

  19. pankaj kumar says:

    Dear Sir

    i am proprietary concern deal in supply of Manpower/ Security Service in GOVT Departments Like Sale Tax / Service Tax DEPT please clerifiy i will charge service tax 14% or in reverse charges 100% pay by service recipients i think any govt department not a body of corporate.

  20. rajender vats says:

    SBI is governed by State Bank of India Act,1955 and not registered under companies Act 1956/2013. So service Tax under reverse charge is not applicable on SBI.
    will Service provider pay ST.

  21. NOUSHAD MK says:

    sir

  22. NOUSHAD MK says:

    sir
    I am a lottery agent and distributing lottery tickets to the sub agents by purchasing from Kerala government.even after the

  23. Sunil Kumar N says:

    Sir

    Can you give a clarification for the following case of Manpower Services.

    We are Service Receiver and will have to pay Rs. 10000/- p.m as salary.
    Whether we have to provide 12.36% full as ST. It so, what will be the net amount to give Cheque?

  24. k.Muralidhar says:

    Dear Sir

    Please clarify the following:
    1 whether services rendered by service provider( individual /unregistered) under Rent a cab service is required to be considered for the purpose of payment of service tax under reverse charge ? If so, what is the value that is required to be considered by the service receiver( company)?

    2. Whether security services rendered by the service provider( company) is required to be considered by service receiver(company) for the purpose of payment of service tax under Manpower supply , assuming the service tax is not charged by the company? Pl clarify the position.

    Kindly reply with clarification.

  25. Asit Sardar says:

    Dear Sir,

    Kindly let us know that as per the changes in the Reverse Charge Mechanism of Service Tax whether a Company providing House Keeping Services has to pay the Service Tax directly to the Government or it will be paid by the Service Receiver?

    Regards,
    Asit Sardar

  26. Datanal says:

    To the Service Tax expert panel

    Dear Sir/Madam,

    I would like to know relevant rules for the following situation:
    A small scale sub-dealer was purchased Microsoft software licenses from a dealer for amount X plus VAT1 plus service tax ST1 on amount X. Dealer invoice contains sub-dealer PAN & Service tax registration number. Then sub-dealer sold same software without modifying to a end-user(govt department) at a price Y plus applicable VAT2 plus applicable service tax ST2 on amount Y. The govt. Department I.e. End-user withheld the service tax amount ST2 stating the sub-dealer should remit the entire amount ST2 to govt. Account and produce the challan for releasing with-hold service amount ST2. As this is multilevel transaction, sub-dealer has already paid the service tax amount of ST1 to dealer and (ST2 – ST1) to govt account, in this situation will you guide me for the following:
    1. Whether the end-user can insist for remittance of ST2 amount to govt. Account before release of withheld amount? Relevant rules please.

    2. If not, on which rules sub-dealer ask the end-user to released the withheld amount?
    3. Any advice to get release of withheld amount.
    4. Reverse machanisam is applicable in this case? If yes, please provide relevant rules.
    With regards,
    Datanal GN

  27. Ashok says:

    ‘Supply of manpower’ has been defined under Rule 2(g) of the Service Tax Rules, 1994 (‘the Rules’) to mean “supply of manpower, temporarily or otherwise, to any person to work under his superintendence or control”.

    Therefore, a transaction will be said to be one of “manpower supply” only when one person [service provider] provides another person [service recipient] with the use of one or more individuals who are contractually employed or otherwise engaged by the first person [service provider].

    In other words, the essence of the transaction will be covered by the fact that the individuals so supplied are in the employment of the service provider/manpower supplier or not. Also, the supervision or control over such manpower supplied should be with the service receiver.

  28. CA Ronak Kothari says:

    As mentioned in respect of services provided or agreed to be provided by way of supply of manpower for any purpose by individual, HUF, firm or AOP to Body Corporate will lead to Reverse Charge.

    However what needs to be looked is whether the housekeeping services is being provided as a supply of service or supply of manpower.

    Basic difference lies if the amount being charged is on hourly basis then that will tantamount to supply of manpower where as if the amount is being charged for whole as a service then it is supply of service which will not lead to applicability of reverse charge.

  29. RAJEEV says:

    sir please sent me this article in rajeevkhulbe12@gmail.com

  30. Manoj Bhansali says:

    Please review your table for point 7(a) for renting of motor vehicle to be paid by service recipient. In my view the Service tax for service recipient is still 40% (i.e., 4.944%) when service tax payment is on ABATED value. You have mentioned it to be 100%. I would be happy to get clarified.

  31. SIVASUBRAMANIAN.C says:

    clarification requires for point no.11

    in respect of service provided by a person involving an aggregator

    the nature of liability, meaning of aggregator

    thanks

  32. CA Sujeet Kumar says:

    Sir
    In the advocate service business entity will not pay service tax under reverse charge if turnover of business entity is less than 10 Lacs.

  33. Atul Jain says:

    required explanation on following:-

    GTA-we are taking transport service by road from a company but company is charging Service tax @ 12.36% on bill since company is registered in courier service than here is service receiver liability under reverse charge or not.

    Work Contract:-if service provider is charging 12.36% in his bill than service receiver is required to pay or not.

    is there anyone who can clear my doubt

    Regards
    Atul Jain

  34. Bharat Anand says:

    Whether 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 cooperative Housing socieity are covered under reverse mechanism?

  35. M V Sitaramaiah says:

    Varsha

    You are Educate the Housekeeping & Manpower Supply Agencies while preparing bills for their services without charging of Service tax, and explain the latest amendments in the Budget.

  36. M V Sitaramaiah says:

    It is very clear that Manpower service received from Individual firm/ HUF or AOP. The service recipient is paid S.T. on 100% of the value of the Service. After payment S.Tax. The same will be taken as Input Service and used for payment of Excise Duty on the Excisable goods.

  37. mahi. says:

    will canvet credit available on Transport goods by rail ?.

  38. Muthu says:

    What is the abatement value for Goods Transport Agency Services

  39. MOHAN BHAT says:

    whenever some persons are required any work and providing services in your premises then it is under Manpower services. Manpower services are under Reverse Charge mechanism.

  40. Mehul says:

    Now MRA service provider is require to file ST3 as a declaration of service provide?

  41. Pooja says:

    If a person undertakes to produce a given result for the establishment through contract labour and labour works under control of contractor and principal employer has no control over labour. In such case such service would not be ‘supply of manpower’. However, if person supplies contract labour for any work of establishment and labour works under control and supervision of principal employer. In such case such service would be ‘supply of manpower’.

  42. Mehul Pathak says:

    In the above article, you have mentioend ratio for RCM under Rent-a-Cab is 50% / 50%.

    In the Budget 15-16, there is no change in Rent-A-Cab

    Please correct accordingly.

  43. Amit Untavatkar says:

    Dear sir,

    Kindly request to advise me on the following point:-

    1> We have booking of some amount of provison for provision of freight outward as on 31.03.2015 , the said provision we are create due to not receipt of Invoices from the transporter as we had already aviling the services & received LR copy from the transporter.

    could you plz advise whether the service tax liability we can book on the provision amount under GTA servcices as on 31.03.2015 & pay the same or actual service tax liability we can book when the actul receipt of invoice from the transporter.

  44. Varsha says:

    More clarification required in case of Manpower services. Housekeeping services where the control on the employees/ manpower provided is of service provider, whether to pay reverse mechanism

  45. Varsha says:

    More clarification required in case of Manpower services. Housekeeping services where the control of person is on service provider whether to pay reverse mechanism

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