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).
Output service is defined under Rule 2(p) of the Cenvat Credit Rules which inter alia excludes a service where whole of service tax is liable to be paid by the recipient of service. Thus, in cases where there is full reverse charge on a particular service, then such service does not qualify as âoutput serviceâ.e will now analyse whether all the service providers covered under reverse charge, are eligible for this refund or not. Goods or services which are used for providing the output service qualify as input and input service respectively under Rule 2(k) and Rule 2(l) of the Cenvat Credit Rules.