Remuneration to partner
This query is : Resolved
Rajesh Swaminathan
(Querist)
29 March 2013
whether remuneration to partner is liable to service tax under reverse charge mechanism
MEHUL SHAH
(Expert)
30 March 2013
This is a grey area but the following arguments can be put before the Department in favour of the Assessee:
That if Dept considers Partnership firm and partners as separate person then there would be an employer-employee relationship and hence it would be exempt.
and if Dept says that in case of partnership firm there is no employer-employee relationship - means there is agency relationship and that partners and partnership firm are same , that too we are exempt as "only Services from ONE PERSON TO ANOTHER person" is taxable.
That if Dept considers Partnership firm and partners as separate person then there would be an employer-employee relationship and hence it would be exempt.
and if Dept says that in case of partnership firm there is no employer-employee relationship - means there is agency relationship and that partners and partnership firm are same , that too we are exempt as "only Services from ONE PERSON TO ANOTHER person" is taxable.
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