hello caclubindia i would like bring it to your notice that a certain listed company has been employing around scores of employees on contract basis and pays them salary every month also with TDS and ESPF deduction but the question here is that the company issues them FORM 16A every quarter & the employees file their return as contarctor and they seems to have no idea of sevice tax liability is the company right in doing so by employing them as contractor and evading service tax.
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service tax apllicable or not
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Where any person provides any taxable services [ not as an employee] the same could be liable provided that the total services exceed Rs. 10 lakhs [ exemption set out in notification 6/2005]
The company if manufacturing excisable goods or provding taxable services would be in aposition to avail the credit and utilsie the same for their tax payments.
In the absence of employer employee relation, the service may attract service tax . Threshold exemption of Rs.10 lakhs can be claimed.
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