Suppose company A is a management consultancy firm, there is a mutual agreement between company A and company B that company A will employe persons on its own pay roll and provide it to company B, in turn company B will give to company A all the cost regarding employees and 7.5% service charges on cost. right now company is paying service tax on COST+7.5%, but i am of the view that company A may become pure agent by altering contract and pay service tax only on 7.5%.
At present main clause of contract between company A and B is " Company A is responsible to pay to salayry and all other legal dues of employee and other legal formality"
FACT BEHIND ENTERING IN TO SUCH TRANSACTION
Company B doesn't want to take burden of employee on its own pay roll
My question is
1) Under Which Catagory above service is to be registered?
2) Can company A become pure agent of company B by altering Contract
CAclubindia
