Service tax reverse charge mechanism for supply of manpower

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 November 2012 Hi,
Please clarify the calculation for reverse charge mechanism for supply of manpower.How to calculate it.
sample copy of invoice which i have given to my client are as follows:
manpower supply - Rs 147000
management fees- 12857
Service tax 12.36%- 19758
Total invoice amount is 179615.
But i got the money from my client is Rs 176615.
So, Plz let me know,how it is calculated?

Jayant Bothra

Jayant Bothra (Expert)
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22 November 2012 The service ta amount shall be calculated as follows:-
176615/112.36 X 12.36 = Rs 19428.00/-

and this will be the amount that you are required to pay.

Regds

CA JAYANT BOTHRA

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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23 November 2012 I think the difference between the invoice amount and the amount received must be TDS deducted by the client. Kindly confirm the same from him.

If it is actually TDS, then you have to deposit the whole amount of Rs. 19,758 as service tax.

Querist : Anonymous

Querist : Anonymous (Querist)

23 November 2012 when i calculate the TDS @ 2% of 176915 (Invoice Amount) then it come 3592.3

But the difference amount between the invoice amount and received amount is rs 3000

then i just want to know how this value comes.

There is some rule in Service Tax Under Reverse Charge / Tax shift for supply of manpower
Providing service 25%

Receiving the service 75%

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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23 November 2012 1. Yes the amount is not matching. That is why I asked you to confirm from your client.
He is the one who can answer the question best.

2. Yes partial reverse charge is applicable on manpower supply if the service provider is an individual or HUF or firm.

In that case, 25% is to be borne by the service provider and 75% by the service recipient.

What is your status?

Moreover if the client had applied reverse charge then the amount would be even much less, i.e., Rs. 1,64,797

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