Dear Friends and respected experts,
I post a practical querry regarding Service Tax and I shall be thankful if I receive an answer by this evening.
The client company is an AOP established by an official notification in the Gazette of India and an association not for profit. In the final accounts for the F.Y. 2011 - 2012, there is an expense head as "Acquisition and Dissemination of Data" and a correspondng Income head in the nature of "Cess". The AOP previously used to collect and supply infomation to various companies in the steel industry to help fix the prices, feight, etc. However, this activity is now discontinued. The Association maintains Guest Houses in India for which it hires staff, gardeners, etc. from external agencies and charges bills from guests/customers in the guest houses.
In view of the above nature of operations if a firm of Advocates raises bills against the Client AOP, will the Client AOP come under the ambit of Service Tax and be liable to pay the S.T. under the Reverse Charge Mechanism and have to pay the S.Tax on behalf of the Advocate firm ? Will the activities of the AOP considered as "Business" by the S.Tax norms ?
Please answer the questios considering the two situations as below :
If both the parties are unregistered under the S.Tax Act.
If the Advocate firm is registered but the AOP is not and vice versa.
Please treat this as urgent and if any reply can be had by this evening.
Thanking you and with best regards.
CAclubindia
