Labour charges
This query is : Resolved
SANJAY KUMAR
(Querist)
02 April 2016
WE ARE CONSTRUCTING A FACTORY BUILDING IN LABOUR CONTRACT. ALL THE MATERIALS ARE PURCHASED BY US DIRECTLY AND CONTRACTOR IS PROVIDING US ONLY LABOUR.
THE CONTRACTOR IS PARTNER SHIP COMPANY AND WE ARE PVT LTD. COMPANY.
MY QUESTION IS THAT WE HAVE PAID HIM 5 LACS IN A FINANCIAL YEAR AND CONTRACTOR IS NOT CHARGING US SERVICE TAX WITH THE REASON THAT HIS LIMIT OF 9 LACS HAS NOT REACHED IN A FINANCIAL YEAR.
WE AS A PVT LTD COMPANY WILL FALL UNDER REVERSE CHARGE OR NOT ??? IF YES DO WE HAVE TO PAY SERVICE TAX ?,IF YES HOW MUCH .
IF WE TAKE SERVICE TAX REGISTRATION CAN WE GET IS CANCELLED AFTER 1 YEAR WHEN THE PROJECT IS COMPLETED.???
THE CONTRACTOR IS PARTNER SHIP COMPANY AND WE ARE PVT LTD. COMPANY.
MY QUESTION IS THAT WE HAVE PAID HIM 5 LACS IN A FINANCIAL YEAR AND CONTRACTOR IS NOT CHARGING US SERVICE TAX WITH THE REASON THAT HIS LIMIT OF 9 LACS HAS NOT REACHED IN A FINANCIAL YEAR.
WE AS A PVT LTD COMPANY WILL FALL UNDER REVERSE CHARGE OR NOT ??? IF YES DO WE HAVE TO PAY SERVICE TAX ?,IF YES HOW MUCH .
IF WE TAKE SERVICE TAX REGISTRATION CAN WE GET IS CANCELLED AFTER 1 YEAR WHEN THE PROJECT IS COMPLETED.???
CA R SEETHARAMAN
(Expert)
02 April 2016
You will fall under reverse charge. You are liable to pay 14.5% service tax on full value of labour supply bill. You can surrender service tax registration after 1 year.
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