Urgent

Guys kindly solve my query with the relevant supporting notification or circular.

Doubt: For the reverse charge mechanism if the service receipient is a non profit organisation or company u/s 25 , then is it liable to pay service tax in case of reverse charge?

Replies (3)

In my opinion ,there is no exemption to NPO from Service Tax Procedural compliance

 

In ur case if Service receiver is NPO and Service comes under the purview of Reverse charge,then it has to collect service tax.

Hi Sakshi

For reverse charge liability, the service provider has to be an individual / parternership firm / HUF / other unincorporated entities and the service receiver has to be a body corporate.  A body corporate is an AOP, but has a separate and distinct identity from its members.  A section 25 company will fall under the definition of a body corporate and therefore will be liable to pay under reverse charge when it receives services from an individual / parternership firm / HUF / other unincorporated entities.

As regards a non-profit organisation, it depends on the classification outlined above for identifying its liability under reverse charge.

Thanks.

Sakshi,There is no notification regarding it.If NPO is receiving specified service in which reverse charge is applicable,then it has to get registered and pay service tax.

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