Reverse service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 July 2014 Pl may I know if reverse service mechanism is applicable in the case of recruiting agency( non corporate). How much should the recruiting agency claim in his billing as service tax .Is it on 25% of his professional fees or on 100% of his Professional fees. The receiver of the benefit is a Corp and the person selected joins the organisation

Ganeshbabu K

Ganeshbabu K (Expert)
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01 July 2014 taxable under manpower supply
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Reverse charge applicable if service provider is individual or partnership and service receiver is company or LLP
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service provider should cliam 25% of 12.36 i.e, 3.09% of professional charges
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it is the responsibility of service receiver to pay balance 9.27% of service tax on professional charges

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Rupesh Jain

Rupesh Jain (Expert)
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01 July 2014 reverse charge is not applicable on recruitment agency services. it is professional service not the labour charge .

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Ganeshbabu K

Ganeshbabu K (Expert)
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02 July 2014 “Supply of manpower” means supply of manpower, temporarily or otherwise, to another person to work under his superintendence or control.’

[Rule 2(g) of Service Tax Rules, inserted w.e.f. 1-7-2012].
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Meanining says supply of manpower temparorily or otherwise
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which also says permenant also
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Hence in my opinion Service of recruitement agency is covered under Reversecharge mechanism

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