GST
TRT-2025-
AAR Haryana
Date:-22-09-22
In:-
Issue Favourable to Tax Payer ?:-
Facts:
- The Applicant, M/s AS&D Enterprise LLP, is engaged in the business of providing security services to various business entities situated all over India.
- The security services are provided in the form of deployment of security personnels to keep ward & watch and providing safety and security of assets/installations/offices/buildings/ properties/equipments etc. of the site or any other locations as may be specified by the recipient.
- Under GST law, if Security services i.e. services provided by way of supply of security personnel are provided by any person, other than a body corporate, to a registered person, GST is payable under reverse charge.
Issue:
- Whether services (Security services) provided by the applicant LLP are covered by entry 14 of Notification No. 13/2017-CT(Rate) dated 28.06.2017 and liable for tax under reverse charg mechanism or Not?
Order:
- Explanation has been provided in Notification No. 13/2017-CT(Rate) provides that (b) "Body Corporate" has the same meaning as assigned to it in clause (11) of section 2 of the Companies Act, 2013. The said section of Company Act provides that "body corporate" or "corporation" includes a company incorporated outside India, but does not include- (i) a co-operative society registered under any law relating to co-operative societies; and (ii) any other body corporate (not being a company as defined in this Act), which the Central Government may, by Notification, specify in this behalf.
- Body Corporate is a separate legal entity having to bear the full liability for its assets which makes it possible for partners’ liability to be limited to their agreed contribution to the LLP.
- Further, a Body Corporate is an organization such as a company or government that is considered to have its own legal rights and responsibilities. The body corporate is a separate legal entity and can enter into its own contracts and manage its own legal proceedings.
- Thus, it was ruled that an LLP is an Body Corporate for the purpose of Companies Act, 2013 and the same would apply to the term body corporate for the purpose of the Notification No. 13/2017-CGST(Rate) dated 28.06.2017 and as amended on 31.12.2018 vide notification no. 29/2018. In consequence the Reverse Charge Mechanism would not be applicable in the present case.
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