Works contract service

giridharan (Querist) 21 August 2012 This query is : Resolved
Under the new regime of service tax after 01.07.2012, when the works contract service is provided by a proprietary concern operating under a distinct business name; to a factory functioning under a business name and owned by a sole proprietor, will the service receiver liable to pay 50% of service tax under reverse charge method, or the entire liability is on the service provider?
What does the word 'business entity registered as a body corporate' mean
I request clarification.
J. Giridharan

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Inder Kumar Kamra (Expert) 22 August 2012
Rule 2(1)(bc) of Service Tax Rules 1994 defines 'body corporate' as meaning assigned to it in cluase (7) of section 2 of Companies Act 1956 which include company incorporated in India but does not include a co-operative society registered under any law.

In case of works contract services provided by proprietary concern to sole proprietor firm, 100% of service tax to be deposited by service provider