Pure labour contract for contruction
This query is : Resolved
jalpa a. solanki
(Querist)
21 December 2014
I have query about service tax relationg to pure labour contract for contruction, i want to know about tax rate, any abatement if applicable, and reverse charge is applicable to it or not? and in ST-1 under which code in is to be registered?
CA R SEETHARAMAN
(Expert)
21 December 2014
No abatement is applicable. If service is provided to company 50% reverse charge is applicable. code 00440410
jalpa a. solanki
(Querist)
22 December 2014
50% Reverse charge applicable to works contract but i m in a confusion that it is not works contract because it is purely labour work and delivery of any type of material or goods are not involved, in the present case contractor works under builder but only for the labour work and all materials and goods supplied by builder only....? pls help me sir to solve...
Annu Agarwal
(Expert)
22 December 2014
Pure labour contracts are not covered under Reverse charge mechanism.As the labour is directly working under the superintendence and control of the contractor it is not a case of supply of manpower,so no reverse charge applicable.
CA R SEETHARAMAN
(Expert)
22 December 2014
No material is involved that is why no abatement. Reverse charge is applicable for labour contract. Refer the link.
https://icaiahmedabad.com/Jigar-Shah-19-10-2013-Final.pdf
https://icaiahmedabad.com/Jigar-Shah-19-10-2013-Final.pdf
Annu Agarwal
(Expert)
22 December 2014
Dear all
Please consider that it is not a works contract either as there is no transfer in property of any goods in the execution of the contract leviable to vat.
Had the contractor applied as a works contractor with a intention to use the material as well the labour for execution of the contract,it would have fallen within the ambit of works contract.
Here the contractor is charging pure labour charges,so as per my view neither reverse charge nor any abatement shall apply.
Please refer
https://taxguru.in/service-tax/note-service-tax-work-contract-service.html
Please consider that it is not a works contract either as there is no transfer in property of any goods in the execution of the contract leviable to vat.
Had the contractor applied as a works contractor with a intention to use the material as well the labour for execution of the contract,it would have fallen within the ambit of works contract.
Here the contractor is charging pure labour charges,so as per my view neither reverse charge nor any abatement shall apply.
Please refer
https://taxguru.in/service-tax/note-service-tax-work-contract-service.html
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Rupesh Jain
(Expert)
22 December 2014
IF SERVCIE PROVIDER IS COMPANY THEN YOU CHARGE FULL SERVICE TAX.
AND IF RECEIVER IS COMPANY AND PROVIDER OTHER THAN COMPANY THEN PROVIDER CHARGE THE 25% OF SERVCIE TAX AND 75% WILL BE PAY BY THE SERVICE RECEIPENT.
AND IF RECEIVER IS COMPANY AND PROVIDER OTHER THAN COMPANY THEN PROVIDER CHARGE THE 25% OF SERVCIE TAX AND 75% WILL BE PAY BY THE SERVICE RECEIPENT.
jalpa a. solanki
(Querist)
24 December 2014
thanx all of u to help in solving the present case.....thax again....
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