Goods and Services Tax : Understand CBIC's Circular No. 211/5/2024-GST clarifying the ITC time limit under section 16(4) of CGST Act for supplies under RCM...
Goods and Services Tax : Understand CGST Act's Section 16(4) time limits for claiming ITC on RCM supplies from unregistered persons, clarified in SEBI's Ci...
Goods and Services Tax : Understand GST liability under Reverse Charge Mechanism (RCM) for services consumed outside India. Analysis based on recent Rajast...
Goods and Services Tax : Understand Reverse Charge Mechanism (RCM) on Renting of Motor Vehicles and Input Tax Credit (ITC) implications. Learn about tax li...
Goods and Services Tax : Article explains Reverse Charge Mechanism (RCM) under GST law, its necessity, eligibility criteria, time and tax payment aspects, ...
Goods and Services Tax : Advocates' Tax Bar Association urges the Finance Minister to abolish Reverse Charge Mechanism for registered dealers, citing burde...
Goods and Services Tax : Maharashtra Tax Practitioners’ Association has made a representation on Confusion related to Levy of GST under RCM on Reside...
Goods and Services Tax : उपरोक्त विषय में निवेदन है कि इस समय माइनिंग इंडस...
Goods and Services Tax : CBIC issues 43 notifications on 30th September 2019 to give effect to Recommendations made by GST Council in its 37th Meeting. Mos...
Income Tax : ICAI has submitted that the provisions for levy of taxes under the reverse charge mechanism applicable to a registered person, eff...
Service Tax : CESTAT Bangalore held that that service tax on commission paid to foreign commission agents is payable under reverse charge only ...
Goods and Services Tax : Explore the implications of GST AAR Tamilnadu Order No. 04/ARA/2024 dated 28.03.2024 on the taxation of ocean and air export freig...
Goods and Services Tax : Rajasthan HC dismisses petition challenging GST demand on exhibition services. Detailed analysis of the legal arguments and court'...
Goods and Services Tax : Punjab & Haryana HC grants stay on GST demand of Rs. 20.46 Cr on Mitsubishi Electric for seconded employees' salaries, citing Apex...
Goods and Services Tax : Delhi High Court's interim relief to Metal One Corp. by staying GST Reverse Charge Mechanism (RCM) show cause notices. Analysis of...
Goods and Services Tax : Clarification on time limits for ITC on RCM supplies from unregistered persons under Section 16(4) of CGST Act. Read Circular 211/...
Goods and Services Tax : Get clarifications on GST applicability for services provided by directors in personal capacity and supply of food in cinema halls...
Goods and Services Tax : The Ministry of Finance, through Notification No. 06/2023-Union Territory Tax (Rate) issued on 26th July 2023, introduces amendme...
Goods and Services Tax : Notification No. 06/2023-Integrated Tax (Rate) amends GST for GTA, allowing the continuation/exercise of RCM/FCM option. Effective...
Goods and Services Tax : Notification No. 06/2023-Central Tax (Rate) issued by the Ministry of Finance amends GST rates for services as recommended by the ...
Question arises as to whether Royalty payable to the State Government on extraction of natural resource shall be considered as Service and accordingly service tax shall be applicable to a business entity on a reverse charge ? In this note we have analyzed the aspect of service tax payable on royalty with in-depth analysis as below :
According to Section 2(1)(d) of Limited Liability Partnership Act 2008, “Body Corporate” means a company as defined under the Companies Act, 1956 and includes LLP, LLP incorporated outside India, a foreign company but does not include a corporation sole, a registered co-operative society and any other body corporate notified by the Central Government.
Effective from April 1, 2016, under clause (iv) of Section 66D(a) of the Finance Act, 1994, the words ‘support services’ have been substituted by the words ‘any service’ thereby, the liability to pay Service tax on any service provided by Government or a Local Authority to Business Entities is on the service recipient under Reverse Charge except in case of (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.
Article discusses about ‘Any services’ provided by Government or Local authority to a Business Entity chargeable to Service Tax under Reverse Charge w.e.f. April 1, 2016 and includes Related Changes/ Clarification
Presently, in terms of Section 66D(a)(iv) of the Finance Act, 1994 read with Rule 2(1)(d) of the Service Tax Rules, 1994, only ‘support services’ provided by Government or a Local authority to a Business Entity are liable to Service tax under Reverse Charge except (1) renting of immovable property
In Reverse Charge Mechanism Service Receiver is made liable to pay service tax and comply with other provisions of Finance Act, 1994. Further the scope of Reverse Charge Mechanism was extended vide Notification no.-07/2015 and now persons other than service receiver and service providers are also made liable to comply with Finance Act, 1994 provisions.
Central Government had already introduced a system of tax collection at verifiable source rather than through an unverifiable source under Income Tax Act, 1961 as Tax Deduction at Source (TDS). The system was successful enough to contribute to the foundation of Reverse Charge Mechanism. Vide Finance Act, 1996 the Legislature sought to cast the tax net much wider.
Under reverse charge mechanism w.e.f. 1-7-2012, the service receiver is liable to pay tax, without any benefit of threshold exemption alongwith service provider also liable for certain percentage on case to case basis (w.e.f. 1.7.2012 as per Notification No. 30/2012-ST, dated 20.6.2012 as amended by Notifications No. 45/2012-ST, dated 7.8.2012, 10/2014-ST, dated 11.7.2014 and Notification No. 7/2015-ST dated 1-3-2015).
The abatement for GTA service as given under notification no. 26/2012 Dated 20.06.2012 as amended from time to time is 70% and therefore 30% of service tax is liable to be paid. In fact, the abatement ratio has been amended vide notification no.8/2015 dated 1st March, 2015 and the change of abatement from 75% to 70% is w.e.f.1st April, 2015.
The manpower recruitment or supply agency service is defined under section 65(68) of the Finance Act, 1994. The definition as given in the provision is represented below for reference – ‘Manpower recruitment or supply agency’ means any person engaged in providing any service, directly or indirectly, in any manner for recruitment or supply of manpower, […]
