Reverse Charge

[shubham sinha]

Dear Sir , A State Society availing service of monthly hiring vehicle through a agency for its staff and society program .Payment for 2013-14 is 5,11,972/- (in different amt. through out the yr.) . Is there is any liability of society for deduct service tax.

[CA SOHRABH JINDAL]

plz clarify what is the nature of work of society, ie charitable society, society doing any business, housing society

[shubham sinha]

Respected Sir

It is society owned by Government of Bihar . It is working for public welfare, not doing any type of business activity. Getting Grant from Government .

[CA SOHRABH JINDAL]

ur case is falling in partial reverse charge. and it is applicable if the service receiver is a business entity registered as a body corporate. if ur society is not doing any business activity then the reverse charge is not applicable in ur case.

AI Summary

Government Society Exempt from Reverse Charge on Vehicle Hire Due to Non-Business Status, Says Tax Advisor A government-owned state society inquired about its liability for deducting service tax on hiring vehicles for staff and programs, with payments totaling 5,11,972/- for 2013-14. The society, focused on public welfare and not engaged in business activities, sought clarification. A tax advisor explained that the partial reverse charge mechanism applies if the service receiver is a business entity registered as a body corporate. Since the society is not conducting business activities, the reverse charge is not applicable in this case.