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Reverse Charge Mechanism – Chart

 

New system for taxation of services has brought more services under Reverse Charge provisions where service provider and service receiver are severally or jointly liable to pay service tax. The details of such services and extent of liability of service tax is stated below:

Extent of Service Tax Liability payable by Service Receiver & Provider

S. No.

Services Provided By

Description of Service

Services Provided To

Liability of Service Provider (%)

Liability of Service Receiver (%)

1. Insurance Agent Insurance Auxiliary Service Person carrying Insurance Business

NIL

100%

2. Any person Sponsorship Service Body Corporate or Partnership Firm

NIL

100%

3. Any person [In Non Taxable Territory] Any Taxable Service Any person [In Taxable Territory]

NIL

100%

4. Goods Transport Agency Transport of Goods by Road Service Consignor or Consignee

NIL

100%

5. Any Individual Services by Non – Executive Directors Company or Body Corporate

Nil

100%

6. Arbitral Tribunal Legal Consultancy Service

Business Entity

NIL

100%

7. Individual Advocate Legal Consultancy Service

NIL

100%

8. Government or Local Authority Support Services by Government or local authority

NIL

100%

9.

Individual, HUF, Firm or AOP

Renting or Hiring of motor vehicle to carry passenger on abated value i.e. 40%

Body Corporate or Company

Nil

100%

10. Renting or Hiring of motor vehicle to carry passenger on non-abated value

60%

40%

11. Supply of Manpower Services

25%

75%

12. Security Services

25%

75%

13. Works Contract Services

50%

50%

Note 1: Service Provider has to mention service tax on the invoice issued by them to the extent payable by them.

Note 2: Threshold limit benefit of Rs.10 Lacs is not available to Service Receiver and thus service receiver shall be liable to pay service tax even if service provider has not charged service tax on its invoices.

 

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