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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 ..... lly 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/ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices 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 tax by the recipient of supply of goods or services or both instead of the supplier of such goods or services or both sub-section (3) or sub-section (4) of section 9, or under subsection (3) or sub-section (4) of section 5 of Integrated Goods and Services Tax Act. Therefore, under Reverse Charge Mechanism, the liability to pay tax is fixed on the recipient of the supply of goods or services instead of the supplier in respect of notified categories of goods or services. Consequently, in exercise of the powers conferred by sub-section (3) of section 9 of the CGST Act, the Central Government, vide Notification No. 13/2017-CT(Rate) dated 28.06.2017, notified certain categories of supply of services on which the liability to pay tax is on the recipient of such services under reverse ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porate 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, reveals that the above definition does not itself provide meaning of the term 'Body Corporate'. Rather it provides certain inclusions and exclusions from us ambit for the purposes of this notification under GST Law. The LLP is neither covered under inclusions clause nor exclusions provided in the provisions. Accordingly, one need to understand the term 'Body Corporate' by its general meaning. In general parlance, a 'Body Corporate' is understood to mean any entity which has a legal existence separate from its partners. Any LLP, incorporated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 firm. Due to the said explanation, there may be a view that tax is to be paid by the recipient under RCM. However, point to be considered is that the entry no. 14 of the said notification does not make any reference to the term 'Partnership firm, 'Limited Liability Partnership' or 'Firm . On the contrary, entry 14 of the said notification, makes reference to the term 'Body Corporate' only, meaning of which has been discussed above. Therefore, in the understanding of the applicant, a L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 notification, specify in this behalf. e. If the recipients of the services is not registered person than the liability to pay tax under the GST Act is on the supplier of the security services as per section 9(1) though he is not a body corporate. f. An LLP is being considered as a body corporate as per section 2(d) of LLP Act, 2008. g. A person who is liable to pay tax under section 9(3) shall compulsorily register under the GST Act. For the better understanding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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