Issue:- Service tax applicablity on trust
1. As a service provider
2. As Service Receiver( Reverse Charge)
Ans:-
1. As a service provider
Service tax Notification No. 25/2012 dated 20 June’ 2012 Service Tax is exempt on “4. Services by an entity registered under section 12AA of the Income tax Act, 1961 (43 of 1961) by way of charitable activities” The above exemption is available when service is provided by entity registered under section 12AA
2. As Service Receiver( Reverse Charge)
Not exempt when entity registered under 12AA and receives service and liable under reverse charge.Hence liabale to pay service tax under reverse charge.
However, if trust not act as an "BUSINESS ENTITY" the no need to pay service tax under revese charge.
“charitable activities” means activities relating to -
(i) public health by way of -
(a) care or counseling of (i) terminally ill persons or persons with severe physical or mental disability, (ii) persons afflicted with HIV or AIDS, or (iii) persons addicted to a dependence-forming substance such as narcotics drugs or alcohol; or
(b) public awareness of preventive health, family planning or prevention of HIV infection;
(ii) advancement of religion or spirituality;
(iii) advancement of educational programmes or skill development relating to,-
(a) abandoned, orphaned or homeless children;
(b) physically or mentally abused and traumatized persons;
(c) prisoners; or
(d) persons over the age of 65 years residing in a rural area;
(iv) preservation of environment including watershed, forests and wildlife; or
(v) advancement of any other object of general public utility up to a value of,-
(a) eighteen lakh and seventy five thousand rupees for the year 2012-13 subject to the condition that total value of such activities had not exceeded twenty five lakhs rupees during 2011-12;
(b) twenty five lakh rupees in any other financial year subject to the condition that total value of such activities had not exceeded twenty five lakhs rupees during the preceding financial year;
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