Applicability of service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 April 2013 Dear sir,

My client is providing labours to a private limited company on piece rate bases. The work order defines the rate of packing charges per tone bases.. For ex. 1000 rs per tone. In above case my client supply labour and carry packing work of towels and other text tile items and issue bills as per tone rate bases. Means if he has packed 2 tones of material then he charge rs 2000.

In the above case whether service tax is applicable to him if turnover exceeds rs 10 lakhs in a year.. ?

If yes then under what category it will fall..?

CA Ravi Kumar Murugesh

CA Ravi Kumar Murugesh (Expert)
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30 April 2013 If turnover exceeds 10 lakhs:
Your client should collect 25% of 12.36% on charges and 75% of 12.36% will be paid by that company under reverse charge mechanism.

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C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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12 June 2013 If the material cost is also included and not charged separately then you are under composite scheme and the expert's advise is fully applicable

In case you are doing simply labour contract then yes you have to pay 12.36% on the entire amount as ST.

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