07 November 2012
we are registered under income tax act under section 12aa & also have TRUST DEED. under service tax we dont have any liability for service tax as as service provider as it is under negative list point 4 & 34 of Notification no 25/2012. but are we liable to pay service tax under REVERSE MECHANISM of services like (1) service by an advocate. (2) service by of supply of manpower for any purpose.
kindly reply with relevant rules/section and notification as applicable.
08 November 2012
For Advocates: U will not be liable to pay the 75% of service tax because , the reverse charge will apply only if u are a business entity having turnover of above 10 lacs., but as u are a trust registered under Sec 12AA u no neeed to pay on that
On Manpower: U are also not liable as u are not a business entity or a body corporate., u are not liable
08 November 2012
for receipt of services of advocate,reverses charge mechanism is applicable when the service provider is an individual or firm and the recepient should be "a business entity" with a turnover of more than 10 lakhs in the preceding financial year.in this case recepient is required to pay 100% of St under reverse charge mechanism
08 November 2012
as for manpower supply reverse charge mechaism is applicable if the receoient is either a co. registered under comapnies act or a business entity registered as a body corporate.. in this case partial reverse charge mechanism is applicable and the raio being 25% and 75%. 75% being payable by recepient
08 November 2012
Thanks a lot i have observed also this thing while going through notification no 25/2012 & 30/2012. but there is thing about is a proper defination of BUSINESS ENTITY. according to the section 65 b(19) of the finance act 1994 it is a bid different. and according to CBEC website knoweldge portal it is a lil bid different.
may i know relevant rule or section for the clarification of the word BUSINESS ENTITY.
08 November 2012
Business entity is defined in Section 65B (17) as “any person ordinarily carrying out any activity relating to industry, commerce or any other business or profession".
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