Vide Notification No. 15/2012 dated 17.03.2012, the Ministry of Finance had specified that in respect of services provided by an individual advocate to any business entity, the service-tax payable by the advocate shall be Nil and that the person receiving the service shall pay 100% of the tax. This Notification is to come into force from the date on which section 66B of the Finance Act, 1994 comes into effect. S. 66B of the Finance Act, 1994 has been inserted by clause 143 (F) of the Finance Bill 2012.
Vide Notification No. 19/2012 dated 5.6.2012, 1.7.2012 has been appointed as the date on which s. 143(F) of the Finance Act 2012 shall come into force.
The result is that Notification No. No.15/2012-Service Tax dated 17.3.2012 shall come into effect on 1.7.2012.
In interest of revenue and for simplified service tax regime for small and less organized service provider who are very large in number to be exempted from compliance, and services rendered by them can be made taxable under reverse charge method in hands of service receivers who are large organizations. Services of CA,CWA,CS, engineers, architects, manpower suppliers, commercial space providers,commission agents , and many of similar service providers who are self employed persons or small organizations can be easily brought under reverse charge method.
By this way revenue collection will also improve because services of many small service providers who are not liable to pay service tax, will be taxable when tax is imposed on service receiver.
Large organized service providers list and large organized service receivers list can be made.
In fat there can be two categories – services taxable in hands of large organized service providers having huge service receiver/ client or customer base like telecom, internet service provider, banks, insurance, share brokers,…. and similar institutions.
Other list can be for services taxable in hands of service receivers who are comparatively large and more organized then the people who provide service to them So all factories, companies, large institutions who avail services from large number of people can be made liable to pay service under reverse charge method ( except services which are taxable in hands of service providers.