Reverse Charge under Service Tax

 

Reverse Charge under Service Tax

Government of India, Ministry of Finance vide Notification No. 15/2012 dated 17.03.2012,  had added other services under Reverse Charge mechanism wherein service receiver shall be liable to pay the service tax.

 

Vide Notification No. 19/2012 dated 5.6.2012, 1^st July 2012 has been appointed as the date on which it shall come into force

 

The scope of services covered by the reverse charges mechanism has been enhanced by the Finance Act, 2012 read with Notification No. 15/2012- ST. Many services which were hitherto not covered by reverse charge shall now come within its purview:-

a) Services already covered under reverse charge:

S.No.	Description of a service	Percentage of service tax payable by the person providing service	Percentage of service tax payable by the person receiving the service
1	in respect of services provided or agreed to be provided by an insurance agent to any person carrying on insurance business	Nil	100%
2	in respect of services provided or agreed to be provided by a goods transport agency in respect of transportation of goods by road	Nil	100%
3	in respect of services provided or agreed to be provided by way of sponsorship	Nil	100%

b) Services earlier covered under reverse charge but now exempted from applicability of service tax: Services by a mutual fund agent or distributor to mutual fund or Asset Management Company for distribution or marketing of mutual fund.

c) Services covered under Reverse Charge for the first time vide Notification No. 15/2012-

S.No.	Description of a service	Percentage of service tax payable by the person providing service	Percentage of service tax payable by the person receiving the service
1.	in respect of services provided or agreed to be provided by an arbitral tribunal	Nil	100%
2.	in respect of services provided or agreed to be provided by individual advocate	Nil	100%
3.	in respect of services provided or agreed to be provided by way of support service by Government or local authority	Nil	100%
4.	(a) in respect of services provided or agreed to be provided by way of renting or hiring any motor vehicle designed to carry passenger on abated value. (b) in respect of services provided or agreed to be provided by way of renting or hiring any motor vehicle designed to carry passenger on non abated value.	Nil 60%	100 % 40%
5.	in respect of services provided or agreed to be provided by way of supply of manpower for any purpose	25%	75 %
6.	in respect of services provided or agreed to be provided by way of works contract	50%	50%
7.	In respect of any taxable services provided or agreed to be provided by any person who is located in a non-taxable territory and received by any person located in the taxable territory	Nil	100