Taxability
This query is : Resolved
03 June 2013
Hello Friends, please explain difference between labour contract and manpower supply. Also difference in terms of service tax to be paid or charged.
03 June 2013
Labour contract would be responsible for the work. Manpower supply no responsibility.
Manpower supply is under joint charge where receiver liable to pay 75% of ST even where provider is small non corporate.
Manpower supply is under joint charge where receiver liable to pay 75% of ST even where provider is small non corporate.
26 July 2025
Sure! Here’s a clearer explanation about **Labour Contract vs Manpower Supply** and their **Service Tax implications**:
---
### 1. **Labour Contract**
* **Definition:** A contract where the contractor takes responsibility for completing a specified job or work, using their own employees or labourers.
* The contractor is responsible for the **quality, safety, and completion** of the work.
* Examples: Construction contract, repairing a building, cleaning services where contractor supervises work.
**Service Tax:**
* Entire service tax is usually payable by the **service provider** (contractor).
* No reverse charge mechanism applies.
---
### 2. **Manpower Supply**
* **Definition:** Providing manpower (labour/ personnel) to a client without responsibility for the work done by them.
* The client supervises and controls the work.
* The manpower supplier only supplies workers, **not responsible for work outcome**.
* Examples: Providing security guards, casual labourers, housekeeping staff without controlling their work.
**Service Tax:**
* Service tax is paid under **reverse charge mechanism (RCM)**.
* Client (service receiver) is liable to pay **75% of service tax**, while the manpower supplier pays 25%.
* This applies even if the supplier is a small or non-corporate entity.
---
### **Summary Table**
| Aspect | Labour Contract | Manpower Supply |
| ----------------- | ------------------------------- | ---------------------------------------- |
| Responsibility | Contractor responsible for work | Client responsible for work |
| Supervision | Contractor supervises workers | Client supervises workers |
| Service Tax Payer | Service provider pays full tax | Client pays 75%, supplier pays 25% (RCM) |
| Examples | Construction, cleaning contract | Security guards, temporary staff supply |
---
If you want, I can also share specific **service tax rates** or help you with compliance tips! Want that?
---
### 1. **Labour Contract**
* **Definition:** A contract where the contractor takes responsibility for completing a specified job or work, using their own employees or labourers.
* The contractor is responsible for the **quality, safety, and completion** of the work.
* Examples: Construction contract, repairing a building, cleaning services where contractor supervises work.
**Service Tax:**
* Entire service tax is usually payable by the **service provider** (contractor).
* No reverse charge mechanism applies.
---
### 2. **Manpower Supply**
* **Definition:** Providing manpower (labour/ personnel) to a client without responsibility for the work done by them.
* The client supervises and controls the work.
* The manpower supplier only supplies workers, **not responsible for work outcome**.
* Examples: Providing security guards, casual labourers, housekeeping staff without controlling their work.
**Service Tax:**
* Service tax is paid under **reverse charge mechanism (RCM)**.
* Client (service receiver) is liable to pay **75% of service tax**, while the manpower supplier pays 25%.
* This applies even if the supplier is a small or non-corporate entity.
---
### **Summary Table**
| Aspect | Labour Contract | Manpower Supply |
| ----------------- | ------------------------------- | ---------------------------------------- |
| Responsibility | Contractor responsible for work | Client responsible for work |
| Supervision | Contractor supervises workers | Client supervises workers |
| Service Tax Payer | Service provider pays full tax | Client pays 75%, supplier pays 25% (RCM) |
| Examples | Construction, cleaning contract | Security guards, temporary staff supply |
---
If you want, I can also share specific **service tax rates** or help you with compliance tips! Want that?
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Applicability of TDS on CFS, CHA fees, and shipping line charges
- Notice from IT DEPTT IF FD AMOUNT EXCEEDS 10 LACS
- GST payable under RCM
- Unable to generate and save json file for updated return
- Applicablity on tds
- GSTR9- ITC
- PRODUCT AND SERVICE CATEGORY CODE
- WRONGLY UPLOADED 10IF FOR COOPERATIVE SOCIETY
- Regarding TDS not deducted on rent
- Tax audit & Switching from Presumptive taxation
- Import purchase entry
- Rule 54(1A) for Distributing ITC
- EXCESS CREDIT REALTED GST REVERSAL
- Export invoice not reported
- CA Articleship Extension Matter
- GST OFFICER WRONG NOTICE
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Composition Dealer GST Annual Return Filing process
- Revision under Section 264 in The Income Tax Act, 1961
- TDS under section 195.
Trending Online Classes
-
LIVE Course on GSTR-9 & GSTR-9C (Technical | Practical | Concept - Based)
Sachin Jain03 November 2025
CAclubindia
