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

Reverse charge liability for service tax depends on recipient being a business entity; non business public societies not liable. Partial reverse charge service tax applies only when the recipient is a business entity registered as a body corporate; a government owned public welfare society not engaged in business activity and receiving grants does not incur reverse charge liability for contracted vehicle hire services.