Changes in Reverse Charge Mechanism by- Budget 2015
following changes has been made to reverse charge mechanism by budget 2015
1. Manpower supply and security services in full reverse charge (W.E.F. 1ST April 2015)
Presently Partial Reverse Charge is applicable in case of Manpower Supply and Security Service i.e. 50% payable by Service provider and balance 50% by Service Receiver when provided by an individual, HUF, or partnership firm to a body corporate
Amendment by budget-2015:Manpower Supply and Security Service is being brought to full reverse charge i.e. entire service tax to be paid Service Receiver.
2. Following Services have been brought under full reverse charge consequent to withdrawal of the exemption on such services – (W.E.F. 1ST April 2015)
(i) Service provided by mutual fund agents, mutual fund distributors; and
(ii) Service provided by agents of lottery distributor
3. Aggregator or Representative made liable to pay service tax- (W.E.F. 1ST March 2015)
In case of service provided or agreed to be provided by a person involving an aggregator in any manner, the aggregator or representative office located in India is being made liable to pay service tax if the service is so provided using the brand name of the aggregator in any manner under reverse charge scheme. If an aggregator does not have any presence, including that by way of a representative, in such a case any agent appointed by the aggregator shall pay the tax on behalf of the aggregator.
The term “aggregator” has been defined to means a ‘person, who owns and manages a web based software application, and by means of the application and a communication device, enables a potential customer to connect with persons providing service of a particular kind under the brand name or trade name of the aggregator’.