1. Works Contract Service , Service Tax

[DEV BHUSHAN JAIN]

1. 1.      Works Contract Service

 We have taken Work contract service  from one of party. In November, 2012 month he has levied Service Tax on 33% value(after 67% abatement) @ 12.36% while reverse charge rules are applicable from 1^st July 2012.

 Service tax as per reverse charge mechanism:-

 Notification No. 24/2012 provides for abatement for Works contract, service tax on  40% of gross amount (in case of original works)

 Notification No. 30/2012 provides for reverse charge mechanism, Service Provider liability 50% and service receiver liability 50%

 A. Should we deposit service tax as per reverse charge mechanism and debit the party for extra service tax charged ? and if no then why no, while govt. has made liable the company which is receiving service?

 B. Further we have made advance payment for work contract. Should we deposit service tax on advance payment as, Rule 7 of POT, For reverse charge POT will be Date of Payment except payment is not made within 6 months.

1. C.  Should we show in service tax return as per date of payment as it is POT?

Posts / Replies

[Pradeep Khatri]

If the services are being provided to you by LLP, Individual Firm, HUF, Association of Person, then, you are liable to pay the service tax under Partial Reverse Charge Mechanism, otherwise not.