ANYONE OUT THERE Pls help its urgent !!!!!

This is a business service ( providing drivers) it is subject to service tax levy. In any case the user of service to whom you bill , will be able to get  a set off  on this levy paid.  It is always better to  charge service tax whenever you raise a service bill. Err on the right side /  safer side of the  law. particularly when it somes to dealing with Tax matters. Tax man always  itching to slap a demand and  . So it is better to avoid  getting  such future demand of tax penalty and interest  besides  expenses on an avoidable tax litigation. Thanks to complexities of our tax laws in India, despite our best efforts  some times we get entangled in tax litigation on account of thoughtless, overzealous and some times corrupt tax man ! Goodluck to you. Hope this  helps

agree

Well Kgbaliga, I differ.

The service will fall under manpower supply service, service tax is payable by C, who is supplying manpower. The company B is merely getting reimbursement, on which no tax is payable.

(i.) A would not be liable to pay service tax on drivers salary if it is reimbursed separately to B

(ii.) If drivers salary reimbursement is included in bill by B, service tax ought to have been collected on salary also

(iii.) Irrespective of (i) & (ii) C will charge service tax from B on account of providing Manpower Supply service

If the reimbursement route is to be taken it maybe ensured that the conditions set out in Rule 5 92) of the ST Determination of Value Rules 2006 are met. This area is expected to be a dispute prone area in time to come.