Is service tax applicable on freelance work received?

Himanshu (MBA) (45 Points)

02 May 2015  

Hello,

 

I am running a small business where I hire some freelancers from India & abroad; but mostly from India. The freelancer work is like data mining, content drafting etc. I pay them via NEFT on completion of work and not as monthly payment or bi-weekly payments or hourly payments but without adding service tax as such.

 

The process is like:

  1. I reach out to freelancers.
  2. Give them work.
  3. Make them payment after work is submitted via NEFT.

 

I understand that these payments are considered as expenses for my firm (but do I need any document to prove it as expenses or just the statement from bank is enough). And, I also understand that it is an income for the freelancer which will be considered while filing income-tax form by him/her. 

 

But, I am not sure if I need to add service tax to the payment that I making to freelancers via NEFT. I also don't know about legalities. Can someone please shed some lights on it?