S.tax on recruitment charges

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VIPUL SHAH (Querist)
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20 September 2012 one of our client (proprietor) is providing recruitment services to various services

As per Notification No. 30/2012 in respect of services provided or agreed to be provided by way of supply of manpower for any purpose 25:75 is to be paid by service provider & service receiver respectively and accordingly we are charging service tax on 25%

Now, One of the client co. has raised the question that recruitment service is diff. than providing manpower service. Since manpower supply has been defined as "supply of manpower temporarily or otherwise to another person under his superintendence or control" and hence reverse charge mechanism is not applicable to recruitment service and 12.36% needs to be charged fully by proprietor

IS IT TRUE ? do you have any submission on the same ?

CA Nikhil Jhanwar

CA Nikhil Jhanwar (Expert)
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20 September 2012 Although under Old provisions the service category includes Manpower Recruitment also. But Now the word used is only 'manpower supply'. Apparent reading and even the intention of law behind applying reverse charge suggests that the recruitment agencies are not covered under it.

VIPUL SHAH

VIPUL SHAH (Querist)
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20 September 2012 Thanx Nikhil

But now what for other invoices for which it has been raised @ 25%, and pyt. from other company has already been recd. accepting 25: 75 ?

In case there is no intention of law to include recruitment as manpower supply under reverse charge, dept. can recover from us bal. service tax.

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