Service tax applicable???? yes @ what rate

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This query is : Resolved

Aditi A. Jagdale (Querist)

18 January 2016 we are service provider. To one entity we are providing care taking service at the corporate office for which we provide them 3 Nos Office Assistant for daily office routine work + 1 pantry Asst. to serve tea / coffee / lunch etc. and 1 housekeeping assistant. besides we have to give them material for housekeeping for cleaning purpose. plz let me know the service tax / VAT applicability.
Also want know if the service provider is Private Limited company, then what is impact of Service Tax and VAT?????

Ashish Chaudhary

Ashish Chaudhary (Expert)

19 January 2016 1. If the contract is for housekeeping, service tax needs to be charged by service provider (If SP is company).
2. If SP is other than body corporate and service receiver is company, liability may be under reverse charge on service receiver if it exercises control and supritendance over service provider. If contract is of professional housekeeping where SR does not exercise any control, liability would be on SP to charge service tax. Terms of contract vital.
3. Housekeeping material is sold separately, liable to VAT.
4. If not sold separately but used in the course of providing housekeeping service, these could be considered as consumable as these material get consumed during the cleaning process and property does not passes on to service receiver. No VAT on consumable. Service tax would be applicable on gross amount charged.
5. If property in cleaning material passes on to service receiver in the course of providing service, it would be works contract and liable to both service tax and VAT.
Decision to charge tax needs to be taken based on the terms of the contract and roles/ responsibilities of parties

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