Service tax on labour bill

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 July 2013 Dear All,

Please help me to sort out the below mention situation under which category it will falls?

1. Service Provider only charge Labour Charges on Sq. Ft basis to a Company ? Whether liable to Service tax ? if yes under which category ?

2. Service Provider raises bill to a Company on labour supply on daily basis. : This situation falls under Man Power Supply.

3. Service Provider entered in to contract with a company for Road Construction on Sq. Ft basis. Under this contract material and labour both will supply by service provider. In this situation falls under Works Contract Service. But Service tax to be paid 40% or 60% Pl clarify ?

Ganeshbabu K

Ganeshbabu K (Expert)
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07 July 2013 1)service tax applicable only if your labour contractor charges in his bill..Reverse charge not applicable as it fails to satisfy meaning of manpower supply in Rule 2(g) of Service Tax Rules, inserted w.e.f. 1-7-2012.

2)Yes,,it is manpower supply..as here payment was being made irrespective of any condition and contractor is not having any responsibility attached for completion of work.

And it satisfies meaning of manpower supply

“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].

So reversecharge applicable to you if you are business entity registered as a body corporate and service provider is Individual, HUF, proprietary or partnership firm, AOP located in taxable territory.

Thanks & regards
Ganesh babu k

Querist : Anonymous

Querist : Anonymous (Querist)

07 July 2013 Thanks for your prompt reply, but still i can not get the answer of the 1st question which is as under

In 1st Circumstances Under which category Labour contractor shall take registration ?

Ganeshbabu K

Ganeshbabu K (Expert)
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07 July 2013 It can be register as "labour contractor services"--..you please do confirm..

3)“Works contract” means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such property – section 65B(54) of Finance Act, 1994 as introduced w.e.f. 1-7-2012.

But in your case simple labour work was being done with out material then it is not work contract and hence reverse charge not applicable.

Thanks & regards
Ganesh babu k

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