Manpower supply

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CA AJAY KUMAR AGRAWAL (Querist)

17 September 2012 Dear All, as wef 01-07-2012 Service Tax on 75% of the Bill (Manpower Supply Service) is to be paid by Company & balance 25% by contractor. My query is whether the contractor will show Service Tax only on 25% in his bills? As there is less TDS deduction on the same to the extent of 75% of bill.What entries will be passed for the same. Kindly share your views.

CA Navin Jain

CA Navin Jain (Expert)

17 September 2012 yes contractor need to show st on 25% in his bill but if contract show st 100% then need to pay st 25%.

exp dr-112.36
to tds @2% on 112.36
to st payable on reverse charge(100*75%*12.36%)
to party a/c

CA AJAY KUMAR AGRAWAL

CA AJAY KUMAR AGRAWAL (Querist)

18 September 2012 Thanx Navin.In the above condition TDS is on 112.36 & the same value will appear on Form 16 as bill value of Contractor while he has raised bill only for 103.09 (i.e. 100+ST on 25%). What will be entry in that condition.

CA Navin Jain

CA Navin Jain (Expert)

18 September 2012 you have both apper the value of rs. 103.09 or rs 112.36.

CA AJAY KUMAR AGRAWAL

CA AJAY KUMAR AGRAWAL (Querist)

19 September 2012 Dear Navin. There seems some confusion. My point is the contractor has raised bill only for 103.09. In that condition what entry to be passed so that we fullfill our requirement of depositing ST on 75% value. If we deduct TDS on 112.36 then the said value will be taken as bill of contractor & on form 16 also. How can we justify bill amount 112.36 if he has raised bill of only Rs 103.09.

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