Sir,
Whether educational Institutions ( Trust) fall under the Category of Business Entity? I want an answer for this to decide whether reverse charge mechanism is applicabe to educational sector.
Thanking you
CA.A.Jospeh Amul Raj
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Business entity under service tax
Replies (1)
Sir,
As per section 65B(17) buiness entity means " any person ordinarily carriying out any activity relating to industry, commerce or any other business or profession". Hence educational institution are not covered under reverse charge mechanism for the following services
- Legal services
- Services provided by government
- Hiring of motor vehicle
- Supply of manpower
- Works contract services
However, if educational institutions receive services from GTA and sponsorship then reverse charge is applicable to them. This rule applies even if educational instituion is registered as company registered under section 25 of Companies Act 1956.
CA Saravanakumar G
Madurai
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