Remuneration to partner

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Rajesh Swaminathan

Rajesh Swaminathan (Querist)
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29 March 2013 whether remuneration to partner is liable to service tax under reverse charge mechanism

MEHUL SHAH

MEHUL SHAH (Expert)
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30 March 2013 This is a grey area but the following arguments can be put before the Department in favour of the Assessee:

That if Dept considers Partnership firm and partners as separate person then there would be an employer-employee relationship and hence it would be exempt.

and if Dept says that in case of partnership firm there is no employer-employee relationship - means there is agency relationship and that partners and partnership firm are same , that too we are exempt as "only Services from ONE PERSON TO ANOTHER person" is taxable.