St under reverse charge mechanism on csr payments

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This query is : Resolved

Madhu H S (Querist)

12 March 2014 Dear Sir

Pls advise whether ST is to be paid by co. (X ltd) under reverse charge mechanism (RCM)in the below case.

X ltd. pays Mr. K (Individual) for constructing toilet & such other amenities in the nearly 5 schools as a part of its CSR activity. Since the above work is a works contract & the provider of service is an individual, co. has to pay ST under RCM.

Query: Whether ST has to be paid under RCM when the payer (X ltd.) is not actually the service receiver?
(In notification 30/2012, sl no. II the words used are "....... the person who receives the service for the taxable services specified in (I) shall ......"

Kindly advise.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)

12 March 2014 X Ltd IS the service recipient because invoice will be raised on X Ltd. Further X Ltd will make payment for the same.

Accordingly X Ltd has to pay service tax under reverse charge on the above service.

Madhu H S

Madhu H S (Querist)

12 March 2014 Thank you Sir.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)

12 March 2014 You are welcome. You should use the thanks button to convey your thanks.

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