Notification No. 30/2012-ST dated 20.06.2012 widens the coverage of situations wherein service tax is payable under reverse charge mechan...
Notification No. 30/2012-ST dated 20.06.2012 widens the coverage of situations wherein service tax is payable under reverse charge mechanism by including following additional services/situations:
(i) Legal services received by a business entity from individual advocate or partnership firm of advocates;
(ii) Services received by a business entity from arbitral tribunal
(iii) Specified Services received by business entity from government or local authority;
(iv) Following Services received by body corporate business entity from individual, HUF, partnership firm, AOP:
(b) Supply of manpower
(c) Works Contract Services
There is doubt among professionals and assesses that whether service tax is required to be paid under reverse charge mechanism in respect of services received or payment made prior to 01.07.2012.
As per section 68 read with Notification 30/2012-ST dated 20.06.2012, the applicability of reverse charge in respect of additional services/situations covered by said notification is summarised as under:
Applicability of Reverse charge mechanism
Services have been provided or payment has been made prior to 01.07.2012
Service Receiver is not person liable to pay service tax. (Service tax shall be paid by service provider only)
Both the following events will take place on or after 01.07.2012:
(i) Payment to service provider, and
(ii)Provision of services
Service provider and service recipient shall pay service tax as per provision of Notification 30/2012-ST dated 20.06.2012
Note: Date of issue of invoice is immaterial for this purpose.
Note: The above is personal Opinion and not a clarification from Department.CA. Vikas Khandelwal,610, GD ITL Twin Towers,B-08, Netaji Subhash Place,Ring Road, Pitampura Delhi-110034 Ph: 011- 27356481, www.vkcca.com