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    Welcome: To The Roadmap of

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    nalawadednyaneshwer
    This document provides an overview of the reverse charge mechanism (RCM) under service tax in India. It defines RCM as a mechanism where the liability to pay service tax is shifted from the service provider to the service receiver. There are two types of RCM - full RCM, where the entire liability is shifted to the receiver, and partial RCM, where both provider and receiver share liability. The document outlines which services are subject to full and partial RCM. It also discusses how RCM impacts aspects like registration, point of taxation, payment of tax, availment of credit, and service tax exemptions.

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    Welcome: To The Roadmap of

    Uploaded by

    nalawadednyaneshwer
    20 views16 pages
    This document provides an overview of the reverse charge mechanism (RCM) under service tax in India. It defines RCM as a mechanism where the liability to pay service tax is shifted from the service provider to the service receiver. There are two types of RCM - full RCM, where the entire liability is shifted to the receiver, and partial RCM, where both provider and receiver share liability. The document outlines which services are subject to full and partial RCM. It also discusses how RCM impacts aspects like registration, point of taxation, payment of tax, availment of credit, and service tax exemptions.

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    reverse_charge

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    564863_65712_reverse_charge

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    This document provides an overview of the reverse charge mechanism (RCM) under service tax in India. It defines RCM as a mechanism where the liability to pay service tax is shifted from the service provider to the service receiver. There are two types of RCM - full RCM, where the entire liability is shifted to the receiver, and partial RCM, where both provider and receiver share liability. The document outlines which services are subject to full and partial RCM. It also discusses how RCM impacts aspects like registration, point of taxation, payment of tax, availment of credit, and service tax exemptions.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    20 views16 pages

    Welcome: To The Roadmap of

    Uploaded by

    nalawadednyaneshwer
    This document provides an overview of the reverse charge mechanism (RCM) under service tax in India. It defines RCM as a mechanism where the liability to pay service tax is shifted from the service provider to the service receiver. There are two types of RCM - full RCM, where the entire liability is shifted to the receiver, and partial RCM, where both provider and receiver share liability. The document outlines which services are subject to full and partial RCM. It also discusses how RCM impacts aspects like registration, point of taxation, payment of tax, availment of credit, and service tax exemptions.

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    Bhupendra

    Rohilla

    WELCOME

    TO THE

    ROADMAP OF

    SERVICE TAX
    REVERSE CHARGE MECHANISM

    Bhupendra
    Rohilla

    Types of RC

    Conten
    ts

    Services
    covered
    under full RC

    Meaning of RC

    t
    f
    e
    Ben

    RC & its
    Aspects

    Services
    covered under
    Partial RC

    Meaning of Reverse Charge

    Bhupendra
    Rohilla

    Section 68(1) specify that ST in respect of taxable services


    shall be paid by the service provider.

    Section 68(2) makes provisions for reverse charge.

    Meaning of Reverse Charge: Normally ST is paid by the


    service provider but in case of notified services, the liability
    to pay service tax is shifted from SP to SR subject to the
    provisions of section 68(2) read with Rule 2(1)(d) of ST
    Rules,1994, it is called Reverse Charge Mechanism.

    Types of Reverse Charge

    Bhupendra
    Rohilla

    There are two types of reverse charge:


    Full Reverse Charge:

    Under the full reverse charge, the liability to pay service tax
    on specified taxable service is shifted upon service receiver
    in full.
    Partial Reverse Charge:

    Under the partial reverse charge, both SP and SR are liable


    to pay service tax in the portion as specified in Rule 2(1)(d)
    of ST Rules, 1994.

    Reverse charge and other aspect

    RC and Registration

    RC and POT

    RC and Payment

    RC and CENVAT

    RC and SSP Exemption

    10

    Bhupendra
    Rohilla

    Reverse charge and registration

    Bhupendra
    Rohilla

    Normal case:

    As per notification 26/2005 as last amended by notification


    no. 9/2008, any provider of taxable service whose aggregate
    value of taxable service in a financial year exceeds 9 lakh
    rupees shall make an application for registration.
    Reverse charge case:

    However, if a person is required to pay ST under reverse


    charge, it is mandatory to get registered with the department
    immediately irrespective of the fact that the limit of Rs 9
    lakh has not been crossed.

    RC and Point of Taxation

    Bhupendra
    Rohilla

    POT under Normal case:

    POT shall be invoice date subject to condition that invoice is


    issued in accordance with Rule 4A of the ST Rules, 1994.

    If payment is received before the invoice is issued, the POT


    shall be date of receiving the payment.
    POT under Reverse Charge:

    POT shall be date of payment.

    If payment is not made within a period of 3 months from the


    date of invoice, the POT shall be the 1st day that occurs
    immediately after a period of 3 months from the date of
    invoice.

    RC and Payment of ST:

    Bhupendra
    Rohilla

    Normal case

    Service tax liability can be paid through cash/ cheque( Sub.


    to realization); or

    By using CENVAT credit available (Rule 3(4) (e) of CCR2004).


    Reverse Charge case:

    ST under reverse charge can be paid only in cash/ cheque.

    CENVAT credit cannot be used to discharge ST liability


    under reverse charge. (Rule 3(4) (e) of CCR-2004).

    RC and availment of Service Tax

    Bhupendra
    Rohilla

    In respect of input service where whole of the service tax is


    liable to be paid by the recipient of service, credit shall be
    allowed after the service tax is paid.

    However in case of partial reverse charge in order to avail


    credit, it is required to pay ST and invoice value first.

    RC and SSP exemption

    Bhupendra
    Rohilla

    SSP exemption exempts taxable services of aggregate value


    not exceeding ten lakh rupees in any financial year from the
    whole of the service tax leviable thereon under section 66B.

    SSP exemption shall not apply to such value of taxable


    services in respect of which service tax shall be paid by such
    person and in such manner as specified under sub-section
    (2) of section 68 of the said Finance Act read with Service
    Tax Rules, 1994.

    Services covered under full RC

    Bhupendra
    Rohilla

    Service provided by an insurance agent to any person


    carrying on the insurance business.
    Service provided or agreed to be provided by GTA to
    specified 6 person. Q who is liable to pay ST; Q If person
    liable to pay ST is in non taxable territory, then who is liable
    to pay ST.
    Services by way of sponsorship
    to
    corporate or
    partnership firm.
    legal services by an arbitral tribunal, or an individual
    advocate or a firm of advocates to any business entity.
    Note: If in point No. 2-4, SR is in non taxable territory, the
    liability to pay ST shall be on SP.

    Services covered under full RC

    Bhupendra
    Rohilla

    Service provided by a person located in non taxable territory


    to a person in taxable territory.
    Services by a recovery agent to a banking company or a
    financial institution or a non banking financial company
    NNo. 9/2014- ST.
    Service provided or agreed to be provided by a director of a
    company or a body corporate to the said company or the
    body corporate. NNo. 9/2014- ST.
    Support services provided or agreed to be provided by
    Government or local authority.

    Bhupendra
    Rohilla

    Partial Reverse Charge


    Services provided :
    by
    Individual
    HUF
    Partnership Firm
    AOI

    To
    Business Entity
    registered as
    Body Corporate

    Service provider and service recipient both are located in


    taxable territory.

    Services Covered under Partial RC

    Bhupendra
    Rohilla

    Name of Services
    Name of Services
    Supply of Manpower or Security SP- 25%
    SR-75%
    Services
    Services of Works Contract

    SP- 50%

    Renting of motor vehicle to a


    person not in similar line of
    business:
    (a) With abatement
    SP- 100%
    (b) Without abatement
    SP- 40%
    (c) W.e.f 1-10-14 NNo.10/2014 SP- 50%

    SR-50%

    SR-Nil
    SR-60%
    SR-50%

    Questioning Session

    Bhupendra
    Rohilla

    Bhupendra
    Rohilla

    THANK YOU
    Presented By:Name : Bhupendra Rohilla
    E-Mail : Bhupenddra.rohilla@yahoo.com
    M No. : 9013306492

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