Service tax revers charge on recruitment agency

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 August 2012
Sir
if a placement agencies provide a employee
than what would be service tax machinsum

is there revers charges machisum is applicable on that bill ?

CA Navin Jain

CA Navin Jain (Expert)
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20 August 2012 placement agancies not covered by reverse charge.

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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20 August 2012 Yes, Service tax will be charged under reverse charge

CA Navin Jain

CA Navin Jain (Expert)
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20 August 2012 @ amit, placement and recuirt agancies not coverd by reverse charge.

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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20 August 2012 The Board vide Circular No.96/7/2007-ST dated 23.08.2007 has already clarified that Educational institutes such as IITs, IIMs charge a fee from prospective employers like corporate houses / MNCs, who come to the institutes for recruiting candidates through campus interviews.
On the same line, it is covered under reverse charge subject to fufilling other creteria for reverse charge

CA Navin Jain

CA Navin Jain (Expert)
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30 August 2012 Reverse charge mechanism covers taxable services provided or agreed to be  provided by way of supply of manpower for any purpose. Recruitment agency  services being different from Manpower supply services, Reverse Charge  mechanism will not be applicable on it and hence, in such a case, service  tax liability will be on the service provider.     

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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09 February 2016 Under section 65(105)(k) of the Finance Act, 1994. Section 65(105) (k) defined “manpower recruitment or supply agency services” as below:
“taxable service means any service provided or to be provided
(k) to any person, by a manpower recruitment or supply agency in relation to supply or recruitment of manpower, temporarily or otherwise, in any manner”..

But Post Releasing of Negative List applicable from 1st July 2012, They have asked for Reverse Charge for "Supply of ManPower Only".

vide Notification no. 30/2012-ST dated 20th June, 2012. Under said Notification, entry no. 8 deals with the applicability of reverse charge to supply of manpower only (Not Recruitment).

Hence RCM is not applicable on Recruitment Services.

Also from 1st April, 2015, - Now RCM on Suply of Manpower is 100% to be payable by Body Corporate (If Provider is Individual)

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