Reverse charge calculation on manpower supply

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This query is : Resolved

Pavanendra (Querist)

27 July 2013 Dear All,
For the Manpower supply, One of my labour contract issued the bills including Labour Charges,Incentives of Labour, Food provide to labour & room rent for labour.Is it need to pay the reverse tax on above services.Pls solve my problem.

RENGARAJ R.K

RENGARAJ R.K (Expert)

27 July 2013 IN YOUR TERMS OF AGREEMENT ALL SUCH AMENTITIES ARE INCLUDED?

IT IS BETTER HE GIVES A BILL SEPARATE FOR MAN POWER SUPPLY ALONE.

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Ganeshbabu K

Ganeshbabu K (Expert)

28 July 2013 1)Service tax payable on salary plus PF, ESI plus commission of labour contractor.

2)In my opinion

(i)service tax applicable on Incentives paid to labour even though you paid it separately.

(ii)if room rent was included in invoice service tax is definitely applicable on it also

Thanks & regards
Ganesh babu k

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Ganeshbabu K

Ganeshbabu K (Expert)

28 July 2013 (i)You can avoid ST payment on rent by making rent as a reimbursement as per terms of agreement

or

(ii)you make a payment directly to tenant and debit the manpower contractor account for the rent paid amount.

or

(iii)you may avoid it by making cash payment for rent if it not exceeds more than 20,000 and write narration... amount paid for rent towards labour and debit the contractor account for this amount. no ST will come on debiting contractor account for this type of transaction..

However if rent element was included in invoice you cannot escape from ST liability except if it provided in agreement that rent was re-imbursement basis

Thanks & regards
ganesh babu k

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