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Service tax rcm applicability

jayaprasad (Accounts & Finance Manager) (74 Points)

29 January 2016

If the turnover is less than 10Lakh for a private ltd company .The servicetax RCM is applicable for the legal service received by the company or not.

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4 Replies

CMA Poornima Madhava (CMA) (13097 Points)
Replied 29 January 2016

Exemption limit of Rs.10 lacs is not applicable in case of RCM

jayaprasad (Accounts & Finance Manager) (74 Points)
Replied 29 January 2016

Government of India
Ministry of Finance
(Department of Revenue)

Notification No. 25/2012-Service Tax

New Delhi, the 20th June, 2012

G.S.R......(E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the said Act) and in supersession of notification number 12/2012- Service Tax, dated the 17th March, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 210 (E), dated the 17th March, 2012, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the following taxable services leviable thereon under section 66B of the said Act, namely:-

1. Services provided to the United Nations or a specified international organization;

2. Health care services by a clinical establishment, an authorised medical practitioner or para-medics;

3. Services by a veterinary clinic in relation to health care of animals or birds;

4. Services by an entity registered under section 12AA of the Income tax Act, 1961 (43 of 1961) by way of charitable activities;

5. Services by a person by way of-

(a) renting of precincts of a religious place meant for general public; or

(b) conduct of any religious ceremony;

6, Services provided by-

(a) an arbitral tribunal to -

(i) any person other than a business entity; or

(ii) a business entity with a turnover up to rupees ten lakh in the preceding financial year;

(b) an individual as an advocate or a partnership firm of advocates by way of legal services to,-

(i) an advocate or partnership firm of advocates providing legal services ;

(ii) any person other than a business entity; or

(iii) a business entity with a turnover up to rupees ten lakh in the preceding financial year; or

In this notification they are saying Servicetax RCM is exempted for business entity turnover upto 10 lakhs

Saroj Rout (CA FINAL) (120 Points)
Replied 23 April 2016

Since the turnover of your company is less than 10 lakhs ,company is being exempted from payment of service tax under RCM as per the notification 25/2015.

Mir Irshad Ali (Partner) (192 Points)
Replied 25 April 2016

The Services provided by- an individual as an advocate or a partnership firm of advocates by way of legal services to,- a business entity [individual/proprietory/partnership/Pvt. Ltd/Ltd etc) with a turnover up to rupees ten lakh in the preceding financial year is exemption under Notfn No. 25/2012-S.T, hence noservice tax RCM is applicable for the legal service received by such a business entity [individual/proprietory/partnership/Pvt. Ltd/Ltd etc)