CA.A.JOSEPH AMUL RAJ (DY.GENERAL MANAGER ACCOUNTS) (29 Points)
01 April 2013Sir,
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
CA Saravanakumar
(Practice)
(59 Points)
Replied 02 April 2013
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
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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