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

Definition of body corporate: partnership firms and LLPs excluded, so reverse-charge service-tax duties do not automatically apply to them.
The core issue is whether partnership firms or LLPs fall within the statutory meaning of body corporate for reverse-charge service tax obligations. Company-law based definitions of body corporate exclude partnership firms, and service tax provisions separately reference partnership firms where intended. For procedural purposes, service tax rules treat LLPs as partnership firms, so LLPs are governed as partnerships rather than as bodies corporate. Consequently, reverse-charge obligations targeting bodies corporate do not automatically apply to partnership firms or LLPs unless expressly included.