Service Tax Clarification: Arbitral Tribunals' Services Exempt for Small Entities; Reverse Charge for Larger Businesses.
The circular clarifies the applicability of Service Tax on services provided by arbitral tribunals and their members. Services offered to non-business entities or business entities with a turnover below Rs. 10 lakh are exempt from Service Tax. For business entities with a turnover exceeding Rs. 10 lakh, the reverse charge mechanism applies, making the service recipient responsible for the tax. The circular emphasizes that an "arbitral tribunal" includes individual arbitrators, and the tax liability falls on the business entity receiving the service if located in a taxable territory. This clarification aligns with existing legal provisions without changes from the 2016-17 budget.
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