Labour contract and service tax


Sunil P (Partner)     17 July 2015

Sunil P
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In the negative list regime of service tax are pure labour contracts chargeable to service tax? In this case no control / supervision is excercised by the service receiver over the labour. Is there any constitutional prohibition on taxing labour contracts under service tax?

Thanks

Sunil

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U S Sharma (glidor@gmail.com)     17 July 2015

U S Sharma
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if the labour is has employer / employee relation with the principal, then no service tax, but statuary benefits like ESI/ PF/PT/Graduity / Leave  is burden of principal employer, 

in absence of above, it is manpower recuirtment services taxable under service tax, 

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Madhukar N Hiregange (Chartered Accountant)     18 July 2015

Madhukar N Hiregange
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Other than employee or manpower- one more important difference needs otbe understood.

The difference between a job to be done and manpower supply is that the responsibility for the work if with the contractor then it is not manpower supply. If with the employer where no responsibility on contractor other than provding the persons, then it is manpower supply.  

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Sunil P (Partner)     21 July 2015

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Originally posted by : Madhukar N Hiregange
Other than employee or manpower- one more important difference needs otbe understood.

The difference between a job to be done and manpower supply is that the responsibility for the work if with the contractor then it is not manpower supply. If with the employer where no responsibility on contractor other than provding the persons, then it is manpower supply.  

I am sorry I had not elaborated the situation. In the present case the contractee does not have employer - employee relationship with the labour.The contractee has an agreement  with the contractor that the contractee will supply all material for plastering the building and the labour (For plastering the building) has to be performed by the Contractor and his employees at sq.ft rate mutually agreed. The labour will be managed by the contractor .Will such a type of contract  attract service tax? Thanks in advance

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JAGANATHAN R ACMA, SAP(Fi-Co) (Manager Accounts and Finance)     31 July 2015

JAGANATHAN R ACMA, SAP(Fi-Co)
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before making the payment ., you have to consider the service tax., the service tax not consider in labour bill. you have to pay the service tax to department under RCM

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U S Sharma (glidor@gmail.com)     11 August 2015

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dont make the issue complex. 

if the plastering materials are supplied fully or partially and manpower is supplied by contractor then it would go catagorized in "works contract" which would attract service tax and local state vat also under WCT section. 

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glgupta (ca)     14 July 2019

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IN CASE OF LABOUR CONTRACTOR  EXECUTING SOME CONSTRUCTION WORK FOR  WHICH MATERIAL IS BEING PROVIDED BY THE CONTRACTEE  THAN SERVICE TAX AT FULL RATE WITHOUT ANY ABATEMENT SHALL BE LEVIABLE


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