Reverse charge for charitable trust

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siddharth (Querist)
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16 September 2014 Sir/Madam,

If a Charitable trust is receiving services from an individual advocate, then whether trust is liable to pay service tax under reverse charge mechanism..and is there any threshold limit of turnover of charitable trust.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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19 September 2014 If service is provided by an individual advocate or a firm of advocates by way of support services to any business entity located in the taxable territory, it is liable for service tax under the reverse-charge mechanism. The service recipient is liable to discharge the entire service tax. Therefore, the reverse-charge mechanism is applicable if the service is provided by an individual or firm of advocates and is by way of support services. The service recipient is any business entity located in the taxable territory.

Charitable trust is not a business entity. Here, reverse charge is not applicable and there is no service tax obligation. If the advocate is an individual or firm, no service tax obligations arises on his or its part.

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siddharth

siddharth (Querist)
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13 October 2014 Sir, but "business entity" has not been defined in the whole act. If it is receiving some amount of fees for the services rendered by it, can we define it as business entity?

siddharth

siddharth (Querist)
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13 October 2014 Sir, but "business entity" has not been defined in the whole act. If it is receiving some amount of fees for the services rendered by it, can we define it as business entity?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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14 October 2014 If some amount of fees received for services rendered can not be treated as business. Moreover you are a charitable trust not a business entity.

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