applicability of service tax on manpower supply

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Ankit (Querist)
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22 June 2016 Contractor is supplying manpower to local bodies under yearly contract.Whether service tax is applicable or not?

Rupesh Jain

Rupesh Jain (Expert)
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22 June 2016 yes service tax applicable on the manpower @15%.

Ram Avtar Singh

Ram Avtar Singh (Expert)
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22 June 2016 If service provider is Individual, HUF, proprietary firm, partnership firm or AOP located in taxable territory and service receiver is a business entity incorporate as body corporate located in taxable territory; Reverse charge mechanism will apply.

If service receiver is located in non taxable territory or charity or non profit organization, government;reverse charge mechanism will not apply.

Under reverse charge, service receiver is liable to pay service tax on 100% of the value and service provider is not liable to charge or pay service tax to government. ( Changes in budget 2015) . Service tax on manpower supply is covered under full reverse charge mechanism. Now service Tax 14%+Swachh Bharat Cess 0.5%+Krishi Kalyan Cess 0.5%=15% appliaclble

Ankit

Ankit (Querist)
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22 June 2016 sir here service receiver is local body then reverse charge will not be attracted??

Rupesh Jain

Rupesh Jain (Expert)
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23 June 2016 manpower supply RCM applicable on the body corporate only .

Ankit

Ankit (Querist)
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24 June 2016 ok thank you sir

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