Assistant manager
430 Points
Joined March 2013
Hi Prashant
Following are replies pointwise in my opinion :-
a) To ensure compliance of service tax on Reverse charge basis provided your service provider should not be a company(refer notification 30/2012). Further ensure TDS deduction.
b) Yes, it is necessary otherwise how could you ensure that bill raised by agency is as per the terms and condition and not prejudicial to the interest of the company.
c) PO can be acceptable or not. Yes it is one of the criteria to check the authenticity of the aggrement and expenses debited to the books of accounts. However, There should be a signed aggrement.
d) I have seen such type of contract , where it was decided between the parties that PF and ESI liability will be borne by agency concerned and in case not paid by the agency it will transfer to the company where such employees are working. You will see with each bill agency will attach the challan of previous month because at the time of raising of invoice they have not paid the liability of PF and ESI. E.g. For may 2015 bill raised on 01.06.2015, however due date of PF and ESI liability will be 20th or 21st. So every auditor will ensure wheather PF and ESI paid by agency or not.
e) For last point refer abover (d) point.
So, Hope you get the answer of all your question.
Pradeep Kumar
CAclubindia
