The base rate is the minimum amount of earnings that the employee is to receive. The employee may earn additional money by working overtime or by earning incentive bonuses. The amount of money that the employee earns when she works overtime does not increase her base pay amount.
In case of Reverse Charge mechanism the service receiver is either required to pay the whole amount of service tax or part of the amount of service tax.Say for example in case of works contract the service recipient is required to pay 50% of the amount of service tax.n case abatement is applicable then the service tax is not payable on the whole amount of bill. Say for example in case of GTA (goods Transport Agency) the taxable rate is 25% (i.e 75% abatement is allowed).
Even though service tax was introduced on certain specified services as early as in 1994, the mechanism of service tax credits was made available to service providers for the first time in 2002 under the Service Tax Credit Rules, which were thereafter replaced in the year 2004 by the CENVAT Credit Rules.he reverse charge mechanism was first introduced under the Service Tax Rules in 2002 whereby it was provided that in case of provision of service by a non-resident not having an office in India, service tax would be payable by the service recipient.