a mfg company give space to individual for providing xerox service , ( company area )
xerox service provider use his own xerox machine and papers, and charges monthly to company,
company recover rent and electricity charges to xerox service provider.
Now my question is that, individual has not service tax reg. due to less than 10 lac limit
but is compnay liable to pay service tax under reverse charges ?
The above arrangement does not satisfy the defination of "works contract" as per section 65B(54) of the finance act,1994 which says "works contract means a contract wherein transfer in property in goods involved in execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any similar activity or a part thereof in relation to such property."
So, the company is not liable to pay service tax on reverse charge basis.
Thank you Sir
CAclubindia
