service tax and tds applicability

Queries 1258 views 3 replies

One of my client provide crew member to vessel,  so three parties are there 1. vessel company, 2. Agent who is providind labour to vessel and 3. Labour join as a crew member.

Agent make an contract with labour in the name of Vessal company specifically mention that employer is vessel company,

Now agent get money in us $ from vessel company in FC account and paid to labour in $ in his NRE acccount and retain commisssion as his income

My questions are 1 Weather  he is liable for service tax

                              2 Wheather TDS is required on payment to labour (all labour is Non resident indian as stay more than 182 days out of india)

Replies (3)
Originally posted by : Piyush Nagawat

One of my client provide crew member to vessel,  so three parties are there 1. vessel company, 2. Agent who is providind labour to vessel and 3. Labour join as a crew member.

Agent make an contract with labour in the name of Vessal company specifically mention that employer is vessel company,

Now agent get money in us $ from vessel company in FC account and paid to labour in $ in his NRE acccount and retain commisssion as his income

My questions are 1 Weather  he is liable for service tax

                              2 Wheather TDS is required on payment to labour (all labour is Non resident indian as stay more than 182 days out of india)

if the agent is established in india then service tax as well as TDS both are applicable. 

This is classifiable under manpower supply and recruitment service . No tax if it is export of service . Test is whether the recipient is situated outside India and money received in FC. TDS is applicable u/s 195 for payment outside India . But you can avoid TDS with the contention that the employer is the vessel company and you are disbursing salary on behalf of the employer and the salary is not taxable in India.

Mine is the same case. please guide. Dear Seniors /Experts Need your guidance on the following. It would be very nice of you. A U.K. Based concern is importing from India to UK some automotive parts for further processing at their end in UK and exporting to different European countries the final product of their own. The company wants to hire two persons- one in purchase and other for quality check in India. But this concern does not want to hire and pay them directly. It wants some manpower agency (a proprietor ship concern) to undertake the following works for it. • Hire these two persons on the payroll of the company or on manpower agency payroll. (Note: The manpower agency has 8 employees with no PF/ESI. It has PAN of the proprietor and will apply for TAN.) Query: All 8 existing employees having salary less than 15K/M, does the manpower agency require to be registered with ESI as per the latest rule. Had it been a hotel/shop/private coaching centre/nursing home, the registration of ESI would be a must ?.The registration with PF is of course not applicable till the number of employees reaches 20. If the manpower agency may face any problem in getting TAN. • The manpower agency will perform the following things A) Hire these two employees on the agency payroll-the CTC in UK Pound will be decided the by company . B) Maintain payroll for them (start to end) C) The point is that the agency will process the salary and send for remittances to the UK the bill along with its own charges(There could be two bills-one for service charges and the other for actual payment to employees) . The UK will reimburse the amount to the agency who then will make the payment to employees for their salary etc. D) The agency will pay the employees all the expenses they bear to perform their duties. E) The agency will raise the bill to UK (Professional Fee/ Contractual fee or both as per deed). F) The UK will reimburse the cost to agency. Query: What kind of relationship will be the best one between the UK and the agency.The contractors or the Professional one considering the above. Will the UK deduct TDS on payment to agency. • The employees are to be paid a fixed Great Britain Pound per year. Say 24000 GBP/Year(2000 GBP Monthly). Suppose an employee has worked for 25 days in Sept, his payable salary for the month would be GBP 1667. The agency will raise bill for GBP 3334 (for two employees) on the x rate of a date ie. Last date of the month. Query: How should the bill be raised. What should be nature of charges of GBP 3334 on the bill.The same amount will be transferred to the employees account as salary after receving from UK. For other payments like, Mobile/Local conveyance-car expense reimbursement will first be converted into the GBP then will be paid. How would the accounting be effected with the x rate. Million thanks in advance Regards Puran Dangwal


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