Service abetment tax on labour supply

 

Hi Good Morning Friends,

A contractor supplying labour and material to builder for new plumbing works. April-12 to June-12

Bill issued for labour plus material with service tax and vat, (VAT 5% and 12.36% on basic amount)

Bill issued for only labour supply without service tax.

Bill issued for labour supply taking 60% abetment like, (1000-60%)=400*12.36%=49.44+1000=final bill. Rs. 1050

Bill issued only material supply charged 5% VAT no service tax charged.

As far my knowledge there is no abetment for labour supply and 60% abetment is available for labour plus material supply, please correct me if I’m wrong.

As I have advised the contractor to collect and pay 100% service tax on labour bill and 12.36% on labour plus material bill.

Please give your valuable suggestions on above statement.

 

Regards

Rashmi. 

Replies (2)

there was no abatement on labour supply service.

 

but now

services provided or agreed to be provided by way of supply of
manpower or Security services(inserted in notification 45-46
dated 07/08/2012) for any purpose s.tax payable :
25% service provider            Individual (prop )
                                             /Partnership firm (registered
                                             or unregistered) /HUF

75% service provider             any company formed or
                                               registered under the
                                               Companies Act, 1956 (1 of
                                              1956) or a business entity
                                                registered as body corporate
                                               located in the taxable
                                                territory;

 

other case 100% by service provider..
 

Is VAT applicable on manpower services

 

Originally posted by : CA Tarannum Khatri


there was no abatement on labour supply service.

 

but now

services provided or agreed to be provided by way of supply of
manpower or Security services(inserted in notification 45-46
dated 07/08/2012) for any purpose s.tax payable :
25% service provider            Individual (prop )
                                             /Partnership firm (registered
                                             or unregistered) /HUF

75% service provider             any company formed or
                                               registered under the
                                               Companies Act, 1956 (1 of
                                              1956) or a business entity
                                                registered as body corporate
                                               located in the taxable
                                                territory;

 

other case 100% by service provider..
 

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