CA Renu Singhal
PROVISIONS OF LIMITED LIABILITY PARTNERSHIP ACT
According to Section 2(1)(d) of Limited Liability Partnership Act 2008, “Body Corporate” means a company as defined under the Companies Act, 1956 and includes LLP, LLP incorporated outside India, a foreign company but does not include a corporation sole, a registered co-operative society and any other body corporate notified by the Central Government.
Thus, LLP is a body corporate for the purpose of Limited Liability Partnership Act.
PROVISIONS OF COMPANY ACT 2013
As per Section 2(11) “body corporate” or “corporation” includes a company incorporated outside India, but does not include—
♠ a co-operative society registered under any law relating to co-operative societies; and
♠ any other body corporate (not being a company as defined in this Act), which the Central Government may, by notification, specify in this behalf
It is clear from the above definition that LLP is not a body corporate for the purpose of Company Act.
PROVISIONS OF SERVICE TAX ACT
Section 65(14) of Service Tax Act
“Body corporate” shall have the meaning assigned to it in clause (7) of Section 2 of the Companies Act, 1956 – “body corporate” or “corporation” includes a company incorporated outside India, but does not include – (a) a corporate sole; (b)a co-operative society registered under any law relating to co-operative societies; and (c ) any other body corporate (not being a company as defined under this Act) which the Central Government may, by Notification in the official Gazette, specify in this behalf.}
Section 65B(37) of Service tax Act: Defines Person:
“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, not falling within any of the preceding sub-clauses;
Rule 2(cd) of Service Tax Rule:
“partnership firm” includes a limited liability partnership;”.
It can be concluded that legal status for LLP is partnership firm for the purpose of service tax implication, therefore, reverse charge mechanism shall also be discharge by LLP in case where service provider is not liable to pay service tax. Where Service provider is Individual , Partnership firm(includes LLP), HUF and Service receiver is body corporate in that case RCM applicable only for Body corporate . LLP, as Service receiver is liable to discharge in case of sponsorship business, GTA, but not in case of Manpower services, Work Contract Services