Reverse Charge

[sunil jain]

vide Not No 30/2012, service tax is required to be paid on reverse charge basis by recipient of services on certain services. One of such service is service by advocate if recipient is a business entity. As per section 65B(17), Business Entity means "any person ordinarily carrying out any activity relating to industry, commerce or any other business or profession"  

The query is whether a co-operative Thrift & Credit society carrying on financing activities for its members only, can be termed as business entity.

 Thanks,

 CA. R.K. Aggarwal  

[PAWAN KUMAR]

Yes the same would be termed as business entity because  the definition itself clealy stipultes "any other business " which covers the credit society carrying on financing business for its memeber, Therefore would be liable for service tax under reverse charge. 

 

 

AI Summary

Reverse charge: recipients who are business entities must pay service tax, and a cooperative credit society qualifies.
A cooperative Thrift & Credit society carrying on financing activities for its members qualifies as a business entity under the statutory definition, because the phrase "any other business" includes such societies; therefore the society, as recipient of advocate services, is liable to pay service tax under the reverse charge mechanism.