It is important to note that such “purchase tax” on expenses has to be paid by any person who incurs the aforesaid expenditure irrespective of the nature of business and even if the person is not providing any service.
The following chart will help you determine the amount of Service Tax payable on `reverse charge’, both, as a `Service Provider’ and as a `Service Receiver’. Taxpayers looking to limit the amount of tax paid on the sale of property often choose to enter into a Section 1031 Exchange instead of a traditional sale.
In Florida, for example, a transfer tax, known as a stamp tax, must be paid when the title to property exchanges hands under normal circumstances.
Although the stamp tax applies to a traditional exchange of property, the State of Florida has made an exception for Reverse 1031 Exchanges. A taxpayer who wishes to avoid payment of the stamp tax in a Florida Reverse 1031 Exchange should take note of the requirement that a statement should be included in the Real Estate Acquisition Agreement or Purchase and Sale Agreement (PSA) to avoid incurring the tax. For realtors and taxpayers who are considering a reverse, deferred improvement or forward 1031 exchange, visit the Atlas 1031 web site to secure the correct assignment to include in the Real Estate Acquisition Agreement or PSA.
In simple words it can be spelled as tax on specified services provided by the Service Provider.


However, on the certain notified services, responsibility has been cast on the service receiver to pay service tax under the `reverse charge’ mechanism. If a transaction qualifies for Section 1031 Exchange treatment, then capital gains taxes are deferred. Information provided is without warranty and in no event shall Atlas 1031 Exchange or principals be liable for damages, including lost profits, arising out of information offered on this website. Usually the person providing the Services is liable to pay Service tax but here comes an exception, where the service provider is not liable or is partially liable to pay service tax & the recipient has to bear the liability to pay the tax to the Government on behalf the Service Provider. If an activity meets the characteristics of a “service” it is taxable unless specified in the Negative list, or otherwise exempted by a notification. In a Reverse 1031 Exchange, the replacement property is acquired first and then the property to be exchanged is relinquished. We have shared with you earlier how to determine whether there is any `service’ vide our Post Is Service Tax applicable to you in the new regime from 1-Jul-2012?
As part of the 1031 Exchange process, an Exchange Accommodator Titleholder, or EAT, takes title to either the relinquished or the replacement property during the course of the transaction because the Exchangor cannot hold the title to both the relinquished and replacement property at the same time.


Often referred to as a€?parking the title,a€? this practice can have unintended tax consequences if a taxpayer is not careful. In Florida, an Advisement is similar to Private Letter Rulings issued by the Internal Revenue Service.
The services forming part of this Section are discussed with brief explanation herewith: Sr.
Specific to each state is the potential of a transfer tax when the parked property is conveyed to the EAT. If a service is not taxable, it cannot be made subject to service tax, as reverse charge provisions are only for collection and payment of service tax.



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