Liability to pay service tax on manpower contracts

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 December 2012 If we engaged a manpower contractor in our plant for supply of manpower, his annual turnover is less than 10 lakhs. in that case, is there any liability to pay service tax by us. suppose we will pay Rs.80,000/- per month to him for manpower supply, is there any liability to pay service tax @ 12.36% on 75% of that Rs.80,000/-

CA. VIKAS GUPTA

CA. VIKAS GUPTA (Expert)

01 December 2012 Hi,
As per notification no. 30/2012 dt. 20.06.12, service tax is payable by the service receiver on supply of manpower services @ 12.36% on 75% value of services under reverse charge.
Hence in your case, i think, service tax is payable by you on 75% value @ 12.36% irrespective of the fact, whether provider of service is liable to pay service tax or not. Since the service tax under reverse charge is payable by the service receiver hence it doesn't make any difference whether service provider is liable to pay service tax or not

thnx

Pradeep Nainawati

Pradeep Nainawati (Expert)

03 December 2012 You are required to pay ST on reverse charge only if service provider is Individual, HUF, Partnership Firm or AOP.

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