We undertake subcontracts from main contractors. we enter in to pure labour aggrement to undertake specific work like installation, erection of machinery. We are employing Our own labour which works under our supervision and not under supervision of principal contractor.as par Rule 2(g) of Service Tax rules, inserted w.e.f. 1-7-2012 it is not manpower supply.then under what head should we charge service tax?
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Manpower supply
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Check it out, if the work is a pure labour contract or not?
If it is pure labour contract, then the said work will come under "erection, commissioning & installation service".
If it is not pure labour contract, which means, if it involves use of any material which is subject ot VAT and transfer of the same as a part of the contract, then it would be a "Works contract". If it is a works contract, you may pay service tax at a composite rate. However Cenvat credit on imput used is not available.
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