Whether service tax is applicable for trust

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fakrudheen (Querist)
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31 December 2013 we have formed one trust for general public utility, we have received some income as sponsorship, service tax applicable for that income?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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31 December 2013 no. you are not required to register or pay service tax either under normal provisions or under RCM, provided that you are registered with income tax department under section 12A/12AA.

CA Pallav Singhania

CA Pallav Singhania (Expert)
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01 January 2014 As per point 4 of Mega exemption notification 25/2012-Service Tax:

If charitable trust registered with income tax authorities under section 12AA the Income Tax Act, 1961 and carry out‘specified charitable activities’ then such activities would be exempt from service tax..

CA. Vikash Parakh

CA. Vikash Parakh (Expert)
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01 January 2014 If you have received sponsorship from body corporates, then they are liable to pay service tax under reverse charge mechanism.

fakrudheen

fakrudheen (Querist)
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01 January 2014 if party given full amount including service tax, what do in this situation?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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01 January 2014 Please refer to parakh bhai's comment. The service tax shall be paid by the entity who gave sponsorship. What the entity has done is wrong. You better refund the service tax amount.

sudarshan

sudarshan (Expert)
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01 January 2014 income upto 10lacs is exempt. more than that charity has to pay STax

Nikhil Kaushik

Nikhil Kaushik (Expert)
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01 January 2014 Sudarshan, are you sure about this? If I am not wrong, charitable trusts are exempt from service tax!

CA. Vikash Parakh

CA. Vikash Parakh (Expert)
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01 January 2014 Refer Notification no.25/2012 wherein it is mentioned that certain charitable activities (as specified) provided by registered trusts are exempt. However other activities/ services provided by trusts other than the exempted ones are taxable. However, general threshold exemption of Rs.10 lacs is available to trusts also.

sudarshan

sudarshan (Expert)
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02 January 2014 even for charity only certain activities(specified therein) are exempt. Other general public utility services are exempt upto 10 lacs only

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