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TMI Blog2023 (3) TMI 1249X X X X Extracts X X X X X X X X Extracts X X X X ..... f the applicant under any provision of this Act, the application may be rejected by the Advance Ruling Authority after providing an opportunity of being heard to the applicant and in this case. The applicant has undertaken in form ARA-01 that the issue is neither pending nor decided in any proceedings under any of the provisions of the Act. Besides the applicable fees in the case has been paid. So, he is eligible to seek an Advance Ruling under the above provisions and the case is being heard on merits. Statement of facts as per ARA-01 The applicant is Limited Liability Partnership Company registered under the Goods and Services Tax Act, 2017. The applicant is engaged in the business of providing security services to various business entities situated all over India. The security services are provided in the form of deployment of security personnels to keep ward & watch and providing safety and security of assets/installations/offices/buildings/ properties/equipments etc. of the site or any other locations as may be specified by the recipient. The applicant's interpretation of law on the query:-As per section 2(98) of CGST Act, "reverse charge" means the liability to pay ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by any person to above mentioned exempted categories of persons. b) Security services provided by the body corporate to any person. c) Security services provided by any person to unregistered person. As it can be seen from the above-mentioned provisions and explanation, the responsibility to pay tax under reverse charge basis is casted upon the recipient if he receives the notified security services from a person who is not a body corporate. Accordingly, an explanation has been provided in Notification No. 13/2017-CT(Rate) itself to give definition to the term "body corporate" which is reproduced below: (b) "Body Corporate" has the same meaning as assigned to it in clause (11) of section 2 of the Companies Act, 2013. And as per Clause (11) of section 2 of the companies Act, 2013 "body corporate" or "corporation" includes a company incorporated outside India, but does not include- (i) a co-operative society registered under any law relating to co-operative societies; and (ii) any other body corporate (not being a company as defined in this Act), which the Central Government may, by Notification, specify in this behalf; Perusal of section 2(11) of Companies act, 2013, r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry of Corporate Affairs in "FAQS on nature of Limited Liability Partnership" has described structure of LLP as: "LLP shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession". Bare perusal of above provisions of Limited Liability Partnership Act, 2008 and FAQs of Ministry of Corporate Affairs it can be said that LLPs incorporated under LLP Act, 2008 are body corporate for all legal purposes. Reverting back to 2(11) of The Companies Act, 2013, which has been referred by Notification No. 13/2017-CT(Rate), we are of the understanding that LLPs are body corporates and accordingly is not covered by entry no. 14 of Notification No. 13/2017 CT(Rate), meaning thereby tax has to be paid by the applicant under forward charge basis. On the other hand, explanation (e) to Notification No. 13/2017-CTR, describes the 'Limited Liability Partnership' as partnership firm. Relevant extracts of Notification No. 13/2017-CTR are reproduced hereunder. (e) A "Limited Liability Partnership" formed and registered under the provisions of the Limited Liability Partnership Act, 2008 (6 of 2009) shall also be considered as a partnership firm or a f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curity 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. Following points can be inferred from the conjoint reading of the notification and the provisions of the GST Act, 2017 and Companies Act, 2013 and LLP Act, 2009: a. The term 'security services' as per the notification means "services provided by way of supply of security personnel" b. Security services provided by any person other than a body corporate are to be covered under the said notification. c. If the person is obtaining security services from a body corporate, the provisions of RCM will not be applicable. d. As per definition of "body corporate" under section 2(11) of the Companies Act, 2013. It includes a private company, public company, one personal company, small company, Limited Liability Partnership, foreign company etc. However, body corporate does not include- (i) A co-operative society registered under any law related to co-operative societies; and (ii) Any other body corporate (not being a company as defined in the Companies Act, 2013) which the Central Government may, by notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. In conclusion, it can be said that 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. 7. Ruling: - Question Answer Whether services (Security services) provided by the applicant LLP are covered by entry 14 of Notification No. 13/2017-CT(Rate) dated 28.06.2017 and liable for tax under reverse charge mechanism or Not? No (the services provided by the applicant, limited liability company partnership are not covered under the entry 14 of the notification no. 13/2017 dated 28.06.2017 and 29/2018 dated 31.12.2018. The reverse ch ..... X X X X Extracts X X X X X X X X Extracts X X X X
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