Valuation in case of manpower recruitment and supply agency

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Avinash Vithalrao Kulkarni (Querist)
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05 August 2013 If an assessee engaged in supplying temporary labour to a company engaged in seismic survey and data acquisition. Assessee receive the labour charges along with his service charge of 7.5% of total labour payment.

Whether Service tax leviable on this service is on 7.5% service charge or on total payment (i.e. labour payment+7.5% Sr. Charge)?.

If ST is leviable on labour payment+7.56% Sr. Charge then is there any provision for abatement in ST.

CA Suresh Jain

CA Suresh Jain (Expert)
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05 August 2013

Service payable on 25% of the aggregate value of Labour payment and commission thereon by you and on 75% of the value by the service receiver if conditions of clause I A (v) of notification 30/2012 are satisfied

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Avinash Vithalrao Kulkarni

Avinash Vithalrao Kulkarni (Querist)
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06 August 2013 But the service provider is charging Service tax @3.09% on 7.5% of the labour payment, is it allowable?

CA Suresh Jain

CA Suresh Jain (Expert)
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07 August 2013 What the contractor is charging is not correct.

While making the payment under RCM, you should pay your share correctly

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