Person under service tax
1 Service provider and receiver should be ‘person’
¨ Service tax is payable when service is provided by one person to other.
¨ Thus, two ‘persons’ are required – e.g. one branch cannot provide service to another branch (except foreign and Indian branch of same person).
2 Person [section 65B(37)]
¨ “Person” includes,— (i) an individual ii) a Hindu undivided family (iii) a company (iv) a society (v) a limited liability partnership (vi) a firm (vii) an association of persons or body of individuals, whether incorporated or not (viii) Government (ix) a local authority, or (x) every artificial juridical person
3 When UJV can be ‘person’
¨ Unincorporated Joint Venture (UJV) can be AOP and hence a ‘person’ – can be held as service provider or receiver
¨ However, UJV can be ‘Person’ only if there is joint control and conducting business together and the contract is indivisible.
¨ Mere mutual cooperation for income sharing, without joint control or joint liability and where contract is divisible between the members of UJV is not AOP.
4 Unincorporated club is ‘person’
¨ Unincorporated club, association or body of persons providing and its member shall be treated as distinct persons – Explanation 2(a) to section 65B(44) of Finance Act, 1994 w.e.f. 1-7-2012.
5 Branch in India and outside India are different establishments
¨ Branch/office in India and branch/office of same business entity outside India will be treated as different establishments (but not different persons)
6 Carrying on business through branch, agent or establishment
¨ A person carrying on a business through a branch or agency or representational office in any territory shall be treated as having an establishment in that territory.
¨ Mere liaison office is not ‘establishment’, as business is not carried through the Branch.