Joint charge mechanism

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archana v

Service

22 Points Posted on 18 February 2013

Hi Friends,

Please help me clear my confusion on the new notification on service tax dt. 206.2012 w.r.to Joint / reverse charge mechanism.

In case of supply of manpower which is to include security services also from now -- the service receiver is to pay 75% of the ST on behalf of Service provider.

The notifications reads as follows " service receiver is business entity registered as ‘body corporate’ ,

My query is - will the notification apply if the Service receiver is a SOCIETY - registered under Societies Registration Act, 1860. Does Body Corporate includes SOCIETY?

Pls advice!

Replies (4)

CA CS SUMIT GUDDEWAL

Employed

192 Points Posted on 18 February 2013

yes service tax is applicable on all entities sbject to negative list exemptions and mega notifiction exemption

Arun Kumar Singh

GST Advocate

13166 Points Posted on 18 February 2013

You will pay the service tax under reverse charge system, there is no any exemption notification for society. If you have to receive the services from pvt. ltd. company, service tax liability will not be arise under reverse charge system.

vivek

104 Points Posted on 18 February 2013

As per service tax body corporate” has the meaning assigned to it in clause (7) of section 2 of the Companies Act, 1956 (1 of 1956);Section 2(7) in The Companies Act, 1956

As per companies act :-(7) " body corporate" or" corporation' includes a company incorporated outside India but 1[ does not include-

(a) a corporation sole;

(b) a co- operative society registered under any law relating to co- operative societies; and

(c) any other body corporate (not being a company as defined in this Act) which the Central Government may, by notification in the Official Gazette, specify in this behalf;]

So only the above are liable to pay.

Manoj Agarwal

Service Tax Consultant Rourkela Service

2755 Points Posted on 18 February 2013

Dear Archana,

Your confusion is regarding notification no. 30/2012 dated 20-06-12 issued u/s 68(2) relating to reverse charge mechanism.

Firstly, the notification comes into effect from 01-07-2012 which include the service of manpower supply. This notification was amended w.e.f. 07-08-12 to also include the sercurity services and Directors services. So manpower supply and sercurity service are two different & independent services.

'Body Corporate' is not defined in the new Section 65B of the Act, so the definition in earstwhile section 65 is valid as mentioned above by Mr. Vivek. In my view, a society registered under Society Registration Act, 1860 is not a body corporate and hence RCM not applicable and tax payable only by the service provider.

In case you need any further assistance, you may mail me.

Regards,

tax2001-it @ yahoo.com