Payment of Service tax under Reverse Charge

[M C Rawat]

By Combined reading of Notification No. 30/2012-ST dated 20.06.2012 applicable from 01.07.2012 and Notification No. 45/2012-ST dated 07.08.2012 applicable from 07.08.2012

1. The taxable services,_

(i)....

(ii)....

(iii)....

(iv)....

(v) provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers to any person who is not in the similar line of business or supply of manpower or security service for any purpose or service portion in execution of works contract by any individual, Hindu Undivided Family or partnership firm, whether registered or not, including association of persons, located in the taxable territory to a business entity registered as body corporate, located in the taxable territory;

From the above it is clear that liability for payment of service tax under joint charge on security services arises when the following conditions are satisfied:

1. Service provided is of Security Services.

2. Service Provider is Individual, HUF, AOP, Partnership Firms

3. Service Recipient is a Body Corporate i.e. public limited or private limited company.

Ours is a Charitable Trust registered under Section 12 A(A) of the Income Tax Act. We are providing convention services, collecting service tax from the users of facilities and paying the same. We have engaged a Contractor, who provides security services to us.

Please clarify whether Service Tax under reverse charge is payable by us in respect of Security Services being availed by us? And if so, whether we can avail this payment under Cenvat Credit ?

AI Summary

Charitable Trust Not Liable for Service Tax on Security Services; Contractor Bears Full Liability Under Reverse Charge. A discussion on a forum addresses the applicability of service tax under reverse charge for security services provided to a charitable trust. The trust, registered under the Income Tax Act, questions its liability for service tax on security services received from a contractor. One respondent clarifies that since the trust is not a body corporate, it is not liable to pay service tax under reverse charge; the contractor bears full liability. Another respondent adds that the trust can avail CENVAT credit if it provides output services and complies with CENVAT Credit Rules, 2004, as amended.