In Partial Reverse Charge Both Provider And Receiver Pay Service Tax As Shown Below :

Different Services under Partial Reverse Charge - Concept of RCM (Reverse Charge and Partial Reverse  Charge)


Name of Service

% paid by Service Provider

% Paid by Service receiver

Works Contract Service

50%

Individual

HUF

Partnership firm

AOP

50%

Body Corporate

Renting of Motor Cab/Motor vehicle

50%

Individual

HUF

Partnership firm

AOP

50%

Body Corporate

 Manpower Service

(Security guard/labor/placement agency)

25%

Individual

HUF

Partnership firm

AOP

 

75%

Body Corporate

 

Note

Now ful reverse charge on Manpower Service

 

Comparison Reverse Charge and Partial Reverse Charge

Reverse charge

Partial reverse charge

Service tax is paid by service receiver.

Service tax is partly paid by service receiver and partly by service provider.

Service receiver deposits service tax directly to the government.

Some portion of service tax is paid by service provider to the government and some directly by service receiver.

It is a rare case.

It is a very rare case.

 

 

Exam Questions

Question 6
Answer the following questions:
(i) Mr. T, an architect, hires a cab from Mr. S, who is engaged in the business of renting of
motor cabs. Value of services provided by Mr. S is Rs. 2,500. Mr. S avails CENVAT credit
on inputs and capital goods. Who is liable to pay service tax in this case?
Will your answer be different if RST Ltd., a manufacturing company, hires the cab from
Mr. S?
Also, compute the amount of service tax payable assuming that Mr. S is not eligible for
small service providers’ exemption.
Note: Mr. T, Mr. S and RST Ltd. are located in Mumbai and wherever applicable, service
tax has been charged separately. 

View Answer
  1. Indirect Tax
  2. Amendments Indirect Tax for 2016 2017 Exams

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