We found that presently the system (NAV 2013 R2) calculates the service tax liability of the service provider (Service tax with reverse charge e.g. manpower supply) also in the case of unregistered vendors and is crediting the vendor account with that amount. As per the circular of the service tax department, Govt. of India the chargeability of service tax in the case of service provider and service recipient is independent and the service recipient is liable to pay only his share of service tax as per rules even if the balance part / share is not paid by the service provider.
Kindly provide us the correct solution to book the purchase invoice considering the service tax of service recipient only.
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