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2023 (3) TMI 1249 - AUTHORITY FOR ADVANCE RULING, HARYANAScope of supply - Limited Liability Partnership providing security services - whether an LLP can be considered as Body corporate under the provisions of the GST Act, 2017 or not? - applicability of forward charge mechanism or reverse charge mechanism - Applicability of notification no. 29/2018 dated 31.12.2018 - HELD THAT:- The scope of the applicability of the said notification is that the RCM is relevant only when the security services are provided to a registered person and only when the supplier of services is any person other than a body corporate. E.g. if a proprietary concern or a partnership firm provides security services to a registered person then RCM is applicable but if a private Ltd. Company provides such services the same will attract forward charge instead of RCM. An LLP is a viewed as an alternate corporate business model that involves the integration of the advantages of a limited liability company with the flexibility of a partnership. It allows its members the flexibility of organizing their internal structure as a partnership based on a mutually arrived agreement. From the LLP Act, 2008 the main features inter alia are that the LLP shall be a body corporate and a legal entity separate from its partners. Any two or more person, associated for carrying on a lawful business with a view to profit, may by subscribing their names to an incorporation document and filling the same with the registrar, form-a Limited Liability Partnership. It will have perpetual succession. Even if the partners opt to leave, the LLP persists. It can enter into the contracts and own property in its own capacity. It 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. 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. Moreover, the legislative intention behind the application of RCM is on those supplies in which the Government/executive do not have control over the supplier or who are working in the unorganized sector. So, the RCM is made applicable for any person other than body corporate by the said notification. Thus, an LLP is a body corporate and so excluded from the entry no. 14 of the notification no. 13/2017 dated 28.06.2017 and notification no. 29/2018 dated 31.12.2018. The applicant is required to charge applicable tax on the security services supplied by him as per section 9(1) of the CGST/HGST Act, 2017 read with the relevant provision of IGST Act, 2017.
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