Compensation to labour by constractor


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Querist : Anonymous (Querist)
04 April 2015 In an unfortunate event of a contract labour died due to accident while on work. The contractor pay exgratia to the kin of labour; and later raise a bill to company for the partial portion as share basis. I want to know whether such payments to contractor (manpower supply) will attract service tax under reverse charge? and the deduction of TDS on the such payments to contractor applicable ?

04 April 2015 Very first it clear it is not a manpower service because for the manpower service it is necessary an agreement or contract while responsibility of worker and labor force lye on manpower service providers. Hence there is no question of Manpower service and reverse charge. Second one is to deduct tax, it is your choice to deduct or not if you didnot deduct tds liabilities of disallowance on fall on you because this payment niether a salary,contract, or any other head or section of TDS dedcutions.


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