Reverse charge

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Please guide me in following issue;-

Whether a Trust (registered under 12A of Income Tax Act) receiving the service of security, shall be responsible for the Service Tax under Reverse Charge mechanism? or if Trusts are exempted then under which section?

Thanking you all in anticipation

 

Replies (4)

Services by an entity registered under section 12AA of income tax act by way of charitable activity is exempt from servcie tax under mega notification no. 25/2012 section 12A is not covered under exemption of service tax.

Sir in the present case Trust is receiving service. As on plain readingof N no. 25/2012 it says "services by.....". However here Trust is receiving service and thus ques arises that whether Trusts are liable in reverse charge mechanism.

If you are a receiver of security services, you are liable to service tax to the extend of 75% of the tax payable under the reverse mechanism notwithstanding that you are a charitable entity.

I think N. No. 30/2012 has its reply. This is taxable only in case of business entities. Many thanks to the responders.


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