Tax share of service recipient
It has been notified that with effect from July 1, service tax liability arising on account of supply of manpower services shall be borne partially by the service recipient under the reverse charge mechanism, provided that the services are rendered by an individual, HUF, partnership firm or an Association of Person. The share of service tax liability to be borne and paid is in the ratio of 75% by the service recipient and 25% by the service provider.
Accordingly, share of liability to be borne by your firm, being the service recipient, would be 75% of the total service tax liability. The service tax so paid would be available as credit to your firm.
The liability of the service provider and service recipient are different and independent of each other. Thus, in case the service provider is
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