Normally Reverse charge is applicable on this service and the Business Entity has to pay Service tax on it
if Business entity is small
i.e. has turnover upto 10 lacs in the preceding Financial year,
then Service tax is exempt.
Hence for Such small business entity ,Reverse charge is not applicable
However,in following cases,Service Tax is not exempt even for Small Business Entities
Services specified in sub-clauses (i), (ii) and (iii) of clause (a) of section 66D of the Finance Act, 1994 are:
- Services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than Government;
- Services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;
- Transport of goods or passengers.
However, Reverse charge is not applicable on it.