Manpower

Suppose Supplier (of Labour) is Sending labour of Rs. 2 lac to a Corporate Entity and he is clamming that he is not liable to deduct Service Tax and also does not have Service Tax Registration as he is coming under SSI defination of Service Tax. Then whether a corporate entity is liable to deduct Service Tax ?

Replies (4)

Corporate entity is liable to pay service tax on 75% of the value of taxable service i.e. Rs. 2 lakhs. The liability of the service recipient is independent of the liability of the service provider. It is immaterial if the service provider is claiming SSI exemption or not, the service recipient has to discharge his liability.

Yes, the service recipient has to pay the applicable service tax on reverse charge.  He has to use separate challan for this service and the same challan can be used as input service for his other output services, provided such services have the nexus.

can you explain me than what will the invoice raised by the supplier (manpower) to receiver (corporate - ABC CO.,)

BILLING TERMS

ABC CO-------------------------100000

SERVICE CHARGE -------      10000 

                                            -----------------------

                                              1,10,000

 SER.TAX (12%)                    13200

EDU CESS(2%)                         264

HIGH EDU (1%)                          132

                                        ------------------------------

                                                  1,23,596

                                      --------------------------------

Please explain me the billing terms is this correct, i need to charge 25% in 12.36% of service tax

 

The manpower agency has to collect service tax on 25% of his bill amount, and the balance partial 75%will be payable by the service receiver if he falls under company list.

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