St under reverse charge mechanism on csr payments

This query is : Resolved

Madhu H S (Querist)
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12 March 2014 Dear Sir

Pls advise whether ST is to be paid by co. (X ltd) under reverse charge mechanism (RCM)in the below case.

X ltd. pays Mr. K (Individual) for constructing toilet & such other amenities in the nearly 5 schools as a part of its CSR activity. Since the above work is a works contract & the provider of service is an individual, co. has to pay ST under RCM.

Query: Whether ST has to be paid under RCM when the payer (X ltd.) is not actually the service receiver?
(In notification 30/2012, sl no. II the words used are "....... the person who receives the service for the taxable services specified in (I) shall ......"

Kindly advise.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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12 March 2014 X Ltd IS the service recipient because invoice will be raised on X Ltd. Further X Ltd will make payment for the same.

Accordingly X Ltd has to pay service tax under reverse charge on the above service.

Madhu H S

Madhu H S (Querist)
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12 March 2014 Thank you Sir.

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CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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12 March 2014 You are welcome. You should use the thanks button to convey your thanks.

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