Reverse charge mechanism
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
31 May 2013
If service receiver has no income...and he availed the service of advocate..then under RCM whether he has to upload return of service tax eventhough he incurres nil income..
In short,whether service receiver is liable to make return of service tax eventhough he is not generating any income?
In short,whether service receiver is liable to make return of service tax eventhough he is not generating any income?
31 May 2013
Services provided by an individual advocate or a firm of advocates or Arbitral Tribunal to non-business entities (like individuals, charity organizations, etc.), or to a business entity with turnover of less than Rs. 10 lakhs per annum, are exempt.
In case of services provided by an individual advocate or an advocate firm or Arbitral Tribunal to business entity with turnover exceeding Rs. 10 lakhs per annum, the business entity is liable to pay service tax under reverse charge mechanism.
“Business entity” means any person ordinarily carrying out any activity relating to industry, commerce or any other business or profession. Thus, Government, charitable organisation is not ‘business entity’.
In case of services provided by an individual advocate or an advocate firm or Arbitral Tribunal to business entity with turnover exceeding Rs. 10 lakhs per annum, the business entity is liable to pay service tax under reverse charge mechanism.
“Business entity” means any person ordinarily carrying out any activity relating to industry, commerce or any other business or profession. Thus, Government, charitable organisation is not ‘business entity’.
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