Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 26-5-2017 Last Replied Date:- 21-9-2017 – The concept of reverse charge was introduced in the service tax regime vide Notification No. 30/2012, dated 20.06.2012 and came into effect from 20.06.2012. Under reverse charge, the recipient of service is to pay the tax to the credit of the Central Government. The reverse charge is of two types – Full reverse charge and partial reverse charge. Under the full reverse charge, the service recipient is to pay 100% of the tax on the value of services received by him. Under partial reverse charge, the service recipient is to pay certain percentage of tax on the value of taxable service and the balance amount is to be payable by the service provider. The Notification No. 30/2012 has met many amendments and as on date the following services come under the net of reverse charge mechanism- in respect of services provided or agreed to be provided by an insurance agent to any person carr
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eed to be provided by Government or local authorityexcluding,- (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,1994 – 100%; in respect of services provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers on abated value to any person who is not engaged in the similar line of business – 100%; n respect of services provided or agreed to be provided by way of supply of manpower for any purposeor security services – 100%; 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 other than non-assessee online recipient- 100%; n respect of any service provided or agreed to be provided by a person involving an aggregator in any manner – 100%; in respect of services provided or agreed to be provided by way of transportation of goo
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vices. But the GST Act makes the reverse charge applicable to both services and goods. The provisions of the Act and the rules made there under applicable to the service provider are also applicable to the service recipient under reverse charge mechanism. In this Act it is provided that the service recipient, who receives services or goods from the unregistered person, is liable to pay service tax under reverse charge mechanism and for this purpose he is to raise an invoice. Services coming under Reverse charge under GST Under the provisions of GST there is no partial reverse charge mechanism. The GST Council in its 14th Council meeting held on 19.05.2017 approved the list of services coming under reverse change mechanism. Nearly 12 services are coming under reverse charge mechanism. The service recipients in all these case are liable to pay the entire tax (no partial reverse charge mechanism). The following table gives the list of services coming under the reverse charge mechanism, wh
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any partnership firm whether registered or not under any law including association of persons; (g) casual taxable person 3 Services provided or agreed to be provided by an individual advocate or firm of advocates by way of legal services, directly or indirectly An individual Advocate or firm of advocates Any business entity 4 Services provided by an arbitral tribunal An arbitral tribunal Any business entity 5 Sponsorship services Any person Anybody corporate or partnership firm 6 Services by Government or local authority excluding- 1.renting of immovable property; and 2. services specified below- (i) services by the Department of posts by way of speed post, express parcel post, life insurance and agency services provided to a person other than Government; (ii) services in relation to an aircraft or a vessel inside or outside the precincts of a port or an airport; (iii) transport of goods or passengers; Government or local authority Any business entity 7 Services by a director of a comp
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ist etc., Publisher, Music company, producer 12 Radio taxi or passenger transport services provided through electronic commerce operator Tax driver or rent a cab operator Any person – tax is payable by electronic commerce operator by 100%. The above list is subject to changes. – Reply By yateen vyas – The Reply = Sir,In GST credit of Input service tax paid by service receiver will be available or not.As in rate chart of GST they said 5 % with NO ITC. – Reply By MARIAPPAN GOVINDARAJAN – The Reply = The input tax credit available to the service provider will also be applicable under Reverse charge. – Reply By SUDHIR KINHALE – The Reply = Sir,In GST REGIME credit of Cash paid which is paid through reverse charge by service receiver will be available or not.As in rate chart of GST they said 5 % with NO ITC. – Reply By yateen vyas – The Reply = Sir,we are asking about rate chart which is saying 5 % with No ITC so this NO ITC will be for whom for service provider or service receiver. – Reply
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renting of motor cab 5% no itc , what does this mean. – Reply By Anubhav Agrawal – The Reply = Sir, IF GTA is using the service of Truck Owners by hiring the Trucks, do they need to pay tax on reverse charge as they are using the service of an unregistered person. – Reply By Mukesh Meena – The Reply = We are a government body (Govt. Hospital) have contract with manpower suppy agency to provide paramedical staff for 6 month. As per agreement, agency will pay monthly salary to worker and will submit bill with all paid challans like esi, epf, cgst etc. We will bear CGHT payment as per bill of service provider. But there is confusion between our department and ser. provider for tax pay challan.. Service provider said that hospital will pay tax amount firstly then agency will tax to govt. But our hospital says that agency will pay tax as per his invoice and submit tax paid challan so we can make payment on that basis.Pls clarify this confusion as per CGST rule position. – Articles – Knowle
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