reverse charge

[shubham sinha]

A state society is receving services of monthly hire vehicle for the society staff and its program through a agency .whether society should deduct service tax or not, plz suggest me in this regard. total expenditure for the year 2013-14 is 5,11,972/-reverse charge is applicable or not

[Arun Kumar Singh]

If state society is a government body then no need to pay service tax under reverse charge system. only business entities are liable to pay service tax for receiving motor vehicle service.

AI Summary

Reverse charge on motor vehicle hire: government bodies typically not liable; business recipients bear service tax liability.
Reverse charge for hire of motor vehicles depends on the recipient's status: a government body receiving monthly vehicle hire need not pay service tax under reverse charge, whereas business recipients are liable to discharge service tax on receipt of motor vehicle services.