Whether service tax applicability for labour service provided
This query is : Resolved
03 April 2015
Please let me know, whether service tax is applicable or not for following service.
A individual has accepted a work to provide only labour services in respect to insulation of roofing sheets to different parties (private Ltd. Companies) in a year. Is he liable to service tax ? If so, under which category ?
Thanks....
A individual has accepted a work to provide only labour services in respect to insulation of roofing sheets to different parties (private Ltd. Companies) in a year. Is he liable to service tax ? If so, under which category ?
Thanks....
03 August 2025
Here's the scoop on your question about service tax applicability for labour-only services like insulation of roofing sheets:
🔹 Is Service Tax Applicable on Labour-Only Service?
Under Service Tax law (pre-GST era), pure labour services (where only manpower/labour is supplied without any material or goods) were generally exempt from service tax.
However, if the labour service is provided as part of a contract for works (like construction, erection, installation, commissioning), it may fall under “Works Contract Service” or “Construction Service” category, attracting service tax.
🔹 Labour-only Contract vs Works Contract
Works Contract: Contract involving both supply of materials and labour to produce a movable or immovable property.
Labour-only Contract: Only labour provided, no materials supplied.
Important:
Courts and department generally held that pure labour contracts are not liable for service tax.
But if contract includes supply of materials or services are part of construction/installation works, then it is taxable.
🔹 For Your Case
Labour service for insulation of roofing sheets to private limited companies.
If only labour is supplied (no materials from you), then service tax is not applicable.
If you also supply materials (roofing sheets, insulation materials), then it might attract service tax under Works Contract or Construction Service.
🔹 Applicable Service Tax Category (if taxable)
Works Contract Service (Section 65(105)(zzzh) of Finance Act 1994)
Or Construction Services (Section 65(105)(zzzzv)) depending on nature of work.
✅ Summary Table
Scenario Service Tax Applicable? Service Tax Category
Pure labour services only No N/A
Labour + materials supplied Yes Works Contract or Construction
🔹 Is Service Tax Applicable on Labour-Only Service?
Under Service Tax law (pre-GST era), pure labour services (where only manpower/labour is supplied without any material or goods) were generally exempt from service tax.
However, if the labour service is provided as part of a contract for works (like construction, erection, installation, commissioning), it may fall under “Works Contract Service” or “Construction Service” category, attracting service tax.
🔹 Labour-only Contract vs Works Contract
Works Contract: Contract involving both supply of materials and labour to produce a movable or immovable property.
Labour-only Contract: Only labour provided, no materials supplied.
Important:
Courts and department generally held that pure labour contracts are not liable for service tax.
But if contract includes supply of materials or services are part of construction/installation works, then it is taxable.
🔹 For Your Case
Labour service for insulation of roofing sheets to private limited companies.
If only labour is supplied (no materials from you), then service tax is not applicable.
If you also supply materials (roofing sheets, insulation materials), then it might attract service tax under Works Contract or Construction Service.
🔹 Applicable Service Tax Category (if taxable)
Works Contract Service (Section 65(105)(zzzh) of Finance Act 1994)
Or Construction Services (Section 65(105)(zzzzv)) depending on nature of work.
✅ Summary Table
Scenario Service Tax Applicable? Service Tax Category
Pure labour services only No N/A
Labour + materials supplied Yes Works Contract or Construction
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