Service tax on manpower supply agreement

Originally posted by : khushi
	Dear Sir,   We worked for a company, where we supplied manpower to the client for an assigned work, where the employees were on our payroll. we were committed for a commission for the assigned work.  Do we need to pay the service tax for the received amount, which was the reimbursement of the salary of the employees. Secondly is it our obligation to pay the service tax, irrespective of the amount received by the client or not. This case is for the year 2009 -10. waiting for your reply ASAP. with regards

Dear ALL,

The company here is our client.

Pls send the reply ASAP.

with regards

Dear Khusi, I think if your organisation was liable to pay service tax on such/other services provided by it., in FY 2009-10..then liability to pay Service Tax does arise...

However if your client has not paid for the above services provided by you..then there's no liability to pay service tax on that. 

I'd also like to seek opinions of others..

regards,

If it is a contract for carrying out a work, it may not fall under manpower supply. Without knowing nature of the work, it's classification and taxability cannot be stated now. If it is pure manpower supply, gross amuont recieived from the client is taxable although it includes reimbursement of salary. You have basic exemption of Rs.10L provided preceding year's taxable turnover is less than Rs.10L.

If it is a contract for carrying out a work, it may not fall under manpower supply. Without knowing nature of the work, it's classification and taxability cannot be stated now. If it is pure manpower supply, gross amuont recieived from the client is taxable although it includes reimbursement of salary. You have basic exemption of Rs.10L provided preceding year's taxable turnover is less than Rs.10L.