Service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 November 2012 one of my client have readymade garment manufacturing.he has a variour labourer for stitching & embrodiary work.is labourer is liable for service tax ?,what is the limit for them ?,who is liable if labourer has no service tax registration?

CA Sahil Singla..

CA Sahil Singla.. (Expert)
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05 November 2012 Your cleint not liable to Service Tax. Since Labour paid does not amount to payment for service. Be it casual labour or permanent labour

CA Dileep Surya Kumar

CA Dileep Surya Kumar (Expert)
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06 November 2012 If workers are working directly under your client either permanent or casual then not liable to service tax at all.

If workers are working through a contractor i.e Manpower service provider ,providing manpower if he is not corporate , your client company is liable to pay service tax under reverse charge on 75% of value including statutory payment of ESI, PF etc. The threshold limit not applicable under reverse charge / Joint charge.

The remaining 25% contractor is liable to pay i.e he has to collect and pay if the value of taxable services exceeds Rs.10 Lakhs.

Threshold for service tax registration is 9 lakhs.

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