navision note

RELEASE NOTE Microsoft Dynamics ® NAV 2009 SP1 IN
Service Tax – Reverse Charge, Part I
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1. Overview
According to Notification No 15/2012-ST dated 17.03.2012, the proposed Reverse Charge Mechanism is made applicable from the 1st of July, when Section 66B of the Finance Act, 1994 (Charge of Service Tax on and after Finance Act, 2012 - Exemption to small service providers) came into force.

Depending on the scenario, service tax must be paid by the service provider or the service receiver. As a result, when a reverse charge is made, this impacts the service tax liability of both provider and receiver. The following table describes the impact of the reverse charge mechanism in the required scenarios.
No.
Description of a service
Percentage of service tax payable by the person providing service
Percentage of service tax payable by the person receiving the service
1.
in respect of services provided or agreed to be provided by an insurance agent to any person carrying on insurance business
Nil
100%
2.
in respect of services provided or agreed to be provided by a goods transport agency in respect of transportation of goods by road
Nil
100%
3.
in respect of services provided or agreed to be provided by way of sponsorship
Nil
100%
4.
in respect of services provided or agreed to be provided by an arbitral tribunal
Nil
100%
5.
in respect of services provided or agreed to be provided by an individual advocate
Nil
100%
6.
in respect of services provided or agreed to be provided by way of support service by Government or local authority
Nil
100%
7.
(a) in respect of services provided or agreed to be provided by way of renting or hiring any motor vehicle designed to carry passenger on abated value.
Nil
100%
8.
(b) in respect