Reverser charges of service tax

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Girish Limbachiya (Querist)

12 July 2013 We have textile weaving unit and our product is also exempt under excise. We are getting worker through labor contractor. Reverse charges of service tax will applicable to us ?

We have also contractor who are doing Job work for weaving. In this service tax will applicable ?

Ganeshbabu K

Ganeshbabu K (Expert)

12 July 2013 1)Notification No. 25/2012-Service Tax

Entry no. 30 in Negative list

Carrying out an intermediate production process as job work in relation to Textile processing is exempt from service tax

2)Service tax n labour contractor

1)Service should be manpower supply i.e. under command of Principal Employer.

2)“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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3)Security service, cleaning service, piece basis or job basis contract can be ‘manpower supply service’ only if the labour work under superintendence or control of Principal Employer.

4)Service tax payable on salary plus PF, ESI plus commission of labour contractor.

5) 75% tax by service receiver if service provider of manpower supply is individual, HUF, proprietary or partnership firm or AOP

6)AND service receiver is company or business entity incorporated as body corporate. Balance 25% by service provider.

Thanks & regards
Ganesh babu k

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