Individual contractor can considered under manpower supply

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 February 2015 Dear Sir,

We have executed contract with some individual persons for house keeping work, they are doing house keeping work individually,i.e. not supplying any manpower he dose work himself only.

This individual housekeeping contractors can be considered under man power supply's category.

Querist : Anonymous

Querist : Anonymous (Querist)

25 February 2015 Any body can share ?

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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01 August 2024 In the context of Indian indirect tax laws, particularly under the Goods and Services Tax (GST) regime, the classification of services provided by individual contractors can impact the tax treatment. Here’s how to determine whether individual contractors providing housekeeping services can be considered under the "manpower supply" category:

### **1. Understanding "Manpower Supply"**

Under GST, "manpower supply" refers to a service where a person or entity provides labor or workforce to perform work for another entity. The key aspects of this category are:

- **Provision of Labor**: The service provider supplies labor or personnel to perform tasks for the recipient.
- **Control Over Labor**: The service provider has control over the labor provided and typically manages or directs their activities.
- **Service Agreement**: There is usually a contract where the service provider agrees to supply manpower to the recipient.

### **2. Classification of Individual Contractors**

If you have individual contractors performing housekeeping work directly for your organization, and they are not employing or supplying additional manpower, their classification under "manpower supply" depends on the nature of their engagement:

**a. **Nature of Service**:
- **Direct Provision**: If the individual contractors are performing the work themselves without supplying additional personnel, they might not fall under the typical "manpower supply" category. They are directly providing a service rather than supplying labor.

**b. **Contractual Terms**:
- **Contract with Individual**: If the contract is with an individual who performs the housekeeping work personally, this might be categorized under "housekeeping services" rather than "manpower supply."
- **No Additional Labor**: Since they are not supplying any additional manpower, the service might be treated differently for GST purposes.

### **3. GST Treatment**

Under GST, housekeeping services provided by individual contractors would generally fall under the following categories:

**a. **Housekeeping Services**:
- **Nature of Service**: Housekeeping services provided by an individual contractor can be classified as a supply of service under "housekeeping services" (HSN Code 9987).

**b. **Manpower Supply**:
- **Contract with Entity**: If the individual was part of a contract where they were supposed to provide manpower (including themselves and possibly others), the service might be classified under "manpower supply" (HSN Code 9985).

### **4. GST Rate and Compliance**

- **GST Rate**: For housekeeping services, the GST rate is typically 18%. For manpower supply services, the rate is also 18%.
- **Compliance**: Ensure proper invoicing, GST registration, and compliance with GST filing requirements. If the contractor is a registered GST entity, they should issue GST-compliant invoices.

### **5. Practical Example**

**Example**: If you hire individual contractors to clean your premises, and they are not providing any additional personnel and performing all the tasks themselves, this would usually be classified under "housekeeping services" rather than "manpower supply."

### **Conclusion**

Individual contractors performing housekeeping work directly without supplying additional manpower are generally classified under "housekeeping services" rather than "manpower supply." For accurate GST classification and compliance, consider the specific terms of your contract and consult a tax professional if needed.

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