Definition of Body Corporate/Business corporate

[krishna murthy]

As per Notification 30/2012 dtd. 20.06.2012, reciever of service is requuired to pay service tax at prescribed percentage when certain services like manpower supply, security service, works contract, rent-a-cab etc. is provided by a proprietorship/ partner ship / society to a business entity registered as body corporate. Further difinition of body corporate is taken from section 7 of the companies Act, 1956 as amended. As per Section 7 of the companies Act A body Corporate ' includes a copany registered outside India but does not include a proprietorship, Co-operative society, Corporate sole and any other company ( other than those registered under Compnies act,).

Here the moot question arises whether a partnership firm or LLP gets covered under the definiton of Body corporate as the definition does not mention term 'Firm' anywhere in the definition. There are different views on this issue. Some of the partnership assesees are even discharging service tax under reverse charge. can this confusion be cleared at the earliest as this will have a huge revenue implication.

Krishnamurthy .M.S.

supdt. service Tax, Bengaluru.

AI Summary

Debate on 'Body Corporate' Definition Under Companies Act 1956: Impact on Service Tax for Partnerships and LLPs A discussion on the definition of 'body corporate' under the Companies Act, 1956, and its implications for service tax liability under Notification 30/2012. The main issue is whether partnership firms or LLPs are considered 'body corporates' for service tax purposes. Various contributors argue that the term 'body corporate' does not include partnership firms or LLPs, as these are treated separately under service tax rules. Despite differing opinions, the consensus leans towards excluding partnerships and LLPs from being classified as 'body corporates,' thus affecting their service tax obligations. Participants seek clarity on this issue due to its significant revenue implications.