service tax under reverse charge - government services, Service Tax

[hubert fernandes]

Hi, As per Union Budget 2016 -17, Any services provided by Govt. to business entity will be liable to service tax under RCM. Is services of electricity, telecom & water by govt. ie. BSNL, MSEB and water bill from municipality liable to service tax under reverse charge?

Posts / Replies

[KASTURI SETHI]

Pl. note the words 'TO BUSINESS ENTITY". It means service provided to individual is not taxable. Also note the definition of 'Govt.' or 'Local Authority. BSNL and MSEB are not fully Government. Municipal Corporation or Committee falls under the definition of 'Local Authority'. There are exemptions and exceptions also. Clear picture will emerge after enactment. The possibility of further change or amendment cannot be ruled out.

[Ganeshan Kalyani]

Service means any activity carried out by one person for another for consideration.

Will supply of electricity be not a sale. The charges are levied based on the unit consumption. Nothing is performed by the provider of electricity but has only supplied the electricity. Can you share your views. Thanks.