Step by Step Reverse Service tax Mechanism Documentation

By Senthamil .T, Sterling and Wilson Ltd

Type of services covered:  

1.          50:50 SERVICE (Vendor & Service tax dept)

2.          25:50 SERVICE (Vendor & Service tax dept)

3.          COMPOSITE JOB SERVICE

4.          NON ABATED VAUE SERVICE

5.          ABATED SERVICE  

This reverse charge rule is applicable only to the Vendor/ subcontractors who are Individual, proprietary concern, HUF, Partnership Firm, AOP, Trust, Co-op Society etc.   

The above rule is not applicable to Private Ltd Company and Limited Company.

1) 50:50 SERVICE (Sub- contractors & Vendor who provides Repairs & Maintenance Services)  

 Case:1(50:50)

 Where Subcontractor is registered under Service Tax , Then Sub contractor will raise an Invoice for works done of  Rs. 10,000/-  + plus Service Tax  @6.18% (50%)  only and  we have to  pay balance @6.18 (50%) to the Service Tax Department.  

( If  any Subcontractor is claiming / charging Service Tax @12.36%  then we have to pay Sub-Contractor Service Tax to the extent @6.18% only and not @12.36% )

GT- Basic  S.tax TDS

ET- Ecess on S.tax TDS

ST- Hcess  On S. Tax TDS.

1.     The above codes are automatically picked from vendor master. Before post invoice, pls check above codes in withhold tax tab & add the basic job work charges amount with GT, ET & ST codes.

2.     If you are not found the above codes (GT,ST& ET) in WHT tab,then pls contact to Mr.XXXXX to update the vendor master.

3.     If you are not add base amount above code in WHT tab, then system wouldn’t calculate correct  amount

4.     Service tax code should be            T1 only( rate 6.18%,create tax code in A/P side ,MM module)

Case: 2(0:50)

Where Subcontractor is not registered under Service Tax due to what so ever reason , Then Sub contractor raise Invoice for works done of  Rs.  10000/-  Then we will pay to the Sub- contractor only Rs. 10,000/- But we have to pay Service tax on reverse charge basis  @6.18% (50%)  to the Service Tax Department.

GT- Basic  S.tax TDS

ET- Ecess on S.tax TDS

ST- Hcess  On S. Tax TDS.

1.     The above codes are automatically picked from vendor master. Before post invoice, pls check above codes in withhold tax tab & add the basic job work charges amount with GT, ET & ST codes.

2.     If you are not found the above codes (GT,ST& ET) in WHT tab,then pls contact to Mr.XXXXX to update the vendor master.

3.     If you are not add base amount above code in WHT tab, then system wouldn’t calculate correct  amount

4.     Service tax code should be V0 only( rate zero, create tax code in A/P side ,MM module)

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