Shivani Mangla

Services covered under Reverse Charge Mechanism from 01.06.2015

(with % and type of person)

S.No. Description of service Service Provider Service Receiver
1 Insurance Agency Services Insurance Agent Any person carrying on insurance business
NIL (0%) 100% (14%)
1A Recovery Agent Services Recovery Agent Banking co./ Financial inst./NBFC
NIL (0%) 100% (14%)
1B Mutual Fund Agent/Distributor Services Mutual Fund Agent/Distributor Mutual Fund/ Asset Mgt Co.
NIL (0%) 100% (14%)
1C Selling or marketing lottery ticket Services Selling or marketing lottery Agent Lottery distributor or selling agent
NIL (0%) 100% (14%)
2 Transport of Goods by Road GTA When person liable to pay freight is Specified person
NIL (0%) 100% (14%)
 # GTA Abatement is now reduced to 70% from erstwhile 75%
3 Sponsorship Services Any person Body corporate/ partnership firm
NIL (0%) 100% (14%)
4 Legal service by advocate Individuals/ Firm of advocates Business Entity
NIL (0%) 100% (14%)
# Excluding a business entity with a turnover up to rupees ten lakh in the preceding F.Y
5 Arbitral Tribunal Arbitral Tribunal Business Entity
NIL (0%) 100% (14%)
# Excluding a business entity with a turnover up to rupees ten lakh in the preceding F.Y
5A Director services Individual Company/ Body corporate
NIL (0%) 100% (14%)
6 Government Support services Govt/ Local Auth. Business Entity
NIL (0%) 100% (14%)
except the following:
a. Renting of Immovable Property,
b. Services by Department of Post by way of Speed Post, Express Parcel Post, Life Insurance and Agency Services;
c. Services in relation to aircraft or a vessel, inside or out side the precincts of a port or an airport;
d. Transportation of goods or passengers.
Government Services NIL (0%) 100% (14%)
Yet to be notified
Renting of Motor Vehicle (WITH ABATEMENT @60%) Individual/ HUF/ Partnership firm AOP/ LLP Business Entity registered as body corporate
NIL (0%) 100% (14%)
Renting of Motor Vehicle (WITHOUT ABATEMENT) Individual/ HUF/ Partnership firm AOP/ LLP Business Entity registered as body corporate
50% 50%
8 Supply of manpower Individual/ HUF/ Partnership firm AOP/ LLP Business Entity registered as body corporate
NIL (0%) 100% (14%)
9 Security Services Individual/ HUF/ Partnership firm AOP/ LLP Business Entity registered as body corporate
NIL (0%) 100% (14%)
10 

 

Service Portion On execution of works contract Individual/ HUF/ Partnership firm AOP/ LLP Business Entity registered as body corporate
Value of service excluding material (Taxable 100%)
50% (7%)
50% (7%)
Original Works (Taxable 40%) 50% (2.80%) 50% (2.80%)
Repair & Maintenance of any goods) (Taxable 70%) 50% (4.9%) 50% (4.9%)
Maintenance, Repairing, Completion or Finishing of immovable property (Taxable 70%) 50% (4.9%) 50% (4.9%)
11 Import of services SP located in Non Taxable Teritory Person located in Taxable Territory
NIL (0%) 100% (14%)
12 Aggregator Services Any Person Any Person
NIL (0%) 100% (14%)
# Small Service Provider’ exemption of Rs. 10 lakh is not available to recipient of service.
# Kindly refer Negative List and Exemption Notification No.25/2012 along with this chart to determine tax liability

(Author is a Taxation Consultant from Faridabad associated with TAXER and can be reached at cashivanimangla@gmail.com)

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Category : Service Tax (3413)
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Tags : Budget (1957) Budget 2015-16 (272)

7 responses to “Services covered under Reverse Charge Mechanism from 01.06.2015”

  1. PRASHANT says:

    only 40% service will be taxable pertaining to original works. 505 as not mentioned in the provisions of execution of works contracts.

  2. VIMALBHARTI says:

    updated detail

  3. Shivani Mangla says:

    Hello SRIRAM

    Please read carefully. It is NOWHERE mentioned in the sheet that original work’s taxable value is 50%.

    50% is the tax sharing liability and not the taxable value. Taxable value is mentioned as 40% only which is written below the word “Original Works”

    If still there is any confusion please let me know.

  4. Shivani Mangla says:

    Hello Abhishek Arora,

    In case of Original works, it is mentioned in part (ii) of 10th point as 40% only & NOT 100%.
    Service provider and service receiver liability will be 50% of service tax i. e. 2.8% and 2.8%

    And if in first part, it is only the value of the service as it is taxed fully i.e. 100%. This is not Original Works. This is only about service portion.

    There is no mistake as I understand. If there is still any confusion, please let me know.

  5. Abhishek Arora says:

    Hello Ms Shivani

    With due respect, I would like to draw your kind attention toward original work where 100% original work is mentioned, there is one mistake. It should be 40% of work done.Service provide and service receive liability will be 50% of service tax i. e. 2.8% and 2.8%

    With Regards

  6. Kalyana Sundaram says:

    Hello Sir,

    Our company is Proprietorship and Security Service Provider also propritorship, who is liable to pay service tax

    Please support

  7. SRIRAM says:

    Original works contract taxable value is 40% and not 50% as mentioned. (refer serial 10)

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