Business entity

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Querist : Anonymous

Querist : Anonymous (Querist)

01 June 2013 Dear Sir,
A partnership firm engaged in business of Bricks manufacturing. And the annual turnover would be around 60 lacs.

Suppose above said firm pays professional fee to lawyer. Then whether the firm is liable to obtain service tax registration as service recipient and pay service tax under reverse charge mechanism as a business entity?

Please clarify.

Ganeshbabu K

Ganeshbabu K (Expert)

01 June 2013 Section 65B of the Finance Act, 1994 - “any person ordinarily carrying out any activity relating to industry, commerce or any other business or profession.”

So it includes partnerships.

Business entities are required to register under respective service to pay service tax under reverse charge.

So you need to get service tax registration and pay service tax accordingly

and you need to register even you pay 2000 also

Querist : Anonymous

Querist : Anonymous (Querist)

02 June 2013 Crossing the limit of 10 lacs turnover is not a big deal for a business entity in today's scenario, whether it is a partnership or a proprietorship. That mean lacs of partnership or proprietorship firms in India are under liability to obtain service tax registration and pay service tax under RCM ?

Ganeshbabu K

Ganeshbabu K (Expert)

02 June 2013 Yes, it is

https://www.caclubindia.com/experts/reverse-charge-1322739.asp

Querist : Anonymous

Querist : Anonymous (Querist)

02 June 2013 Suppose in the above case, wages paid labour is also subject to service tax under
RCM. As labour work provided by workers is also one kind of service.

Ganeshbabu K

Ganeshbabu K (Expert)

14 June 2013 1)Person approaching himself and company appointing him on contract basis is not manpower supply service.

2)even though it is coming under definition of manpower supply reverse charge not applicable to you..as partnership firm is not a body corporate.(if you are LLP is it body corporate)

Thanks & regards
Ganeshbabu k

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