Manpower supply versus works contract

This query is : Resolved

krishan kumar (Querist)
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17 March 2014 I am engaged in manufacturing business and having central excise registration. I receive the labour through contractors for various works like packing and other processes related to manufacture of excisable goods. The services of such contractors would be covered under which service- manpower supply or works contract?

sudarshan

sudarshan (Expert)
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18 March 2014 packing is a part of manufacturing. process amounting to manufacturing is exempt from service tax. So no liability towards Service tax either by service provider or receiver

Gopalkrishna Hegde ,CA,DISA

Gopalkrishna Hegde ,CA,DISA (Expert)
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18 March 2014 Dear Krishan Kumar

My views are as follows.

Please let me know whether the business which you operate is a body corporate?

Since you utilise the service of contractor and as he is engaged in manpower supply

You would be liable to service charge under reverse charge mechanism depending on whether entity is a body corporate( company)

krishan kumar

krishan kumar (Querist)
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25 March 2014 Yes the business is pvt ltd. The contractors have supplied the labourers to me who are working in my factory. I am getting job works done through them.

Gopalkrishna Hegde ,CA,DISA

Gopalkrishna Hegde ,CA,DISA (Expert)
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15 April 2014 Yes in this case you would be liable to service tax on reverse charge mechanism

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