Please Help: Service Tax input Credit under new reverse charge mechanism
Posted Date : 05-Jun-2012 , 09:48:27 am | Posted By: Deepak Tanwar
Category :
Service Tax | Answers :
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Under new reverse charge mechanism, service tax is paid partly by service provider and partly service receiver.
For Example Manpower suply Agency is paid only 25 % and balance 75% is paid by the service receiver
My question here is we are eligible to take 100% tax credit or 75 % input credit?
in my knowledge under the reverse charge mechanism service tax input credit is allowed on challan payment basis
in challan we have paid only 75 %
Please help me
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Answers:
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 Answer by: Ashish Chaudhary |
| Above provision of Reverse Charge is governed by the Notification No.15/2012-ST which shall become operative w.e.f. the date on which section 66B of the Finance Act 1994 comes into effect. Above section shall become operative when negative list based service tax is operationalised. At present, no need to pay service tax partially by service provider and partly by service receiver and accordingly now question of taking partial credit.
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| Comments |
| Posted By : Ashish Chaudhary |
05-Jun-2012, 06:56:34 |
| Please note the clause prior to section 66B which reads as follows:
(F) after section 66A, the following sections shall be inserted with effect from such date as the
Central Government may, by notification, appoint, namely:––
As per above clause, said section 66B (i.e. charging section of Negative List based service tax) will be applicable from a date to be notified by Government. Till date there is no such notification. 28.5.2012 is relevant for those provisions which automtically comes into operation with accent of Finance Bill by President. For section 66B, there will be separate Notification.
In fact, in meeting with commissioner of CBEC, FM had yesterday announced that negative List may come into operation w.e.f. 1/7/2012. |
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| Posted By : Deepak Tanwar |
05-Jun-2012, 05:16:43 |
| The provision come into w.e.f from 28/05/2012 |
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