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Service tax on sec 25 companies under it

Vijay Shankar (Regional Accounts Manager) (80 Points)

25 December 2012

Dear All,

Please let me know applicability of service tax on Section 25 companies under IT Act. Is there any exemption for these type of companies under service tax.

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3 Replies

CA Ayush Agarwal (Kolkata-Pune-Mumbai) (27186 Points)
Replied 25 December 2012

Dear Friend,

Till the Finance Act 2005, most of the NGOs,

not being ‘commercial concerns’ were exempt

from charging service tax. The Finance Act 2006

has substituted references in the Finance Act,

1994 to the expression ‘commercial concern’

in relation to 17 taxable services, with the

term ‘person’ or ‘any person’. The implication

of this is quite wide and now even a nonprofit making entity, say a charitable trust

or a company registered under section 25 of

the Companies Act, is liable to pay tax and is

eligible to take credit of such tax paid on its

input services. Thus, if any of the activities of

an NGO falls under any of the services covered

in clause 105 of section 65 of Finance Act 1994,

care should be taken to ascertain service tax

implications.

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CA Ayush Agarwal (Kolkata-Pune-Mumbai) (27186 Points)
Replied 25 December 2012

Apart from This,

There Was One Rulling of CESTAT, in 2008, GLIM - 2008/11 -CESTAT Held in Favour of Assessee, Since This is Not a Concluded Hearing, We Cant Undertake This assumption.

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