REVERSE CHARGE MECHANISM IS AVAILABLE TO MR X NOW CALCULATE SERVICE PORTION OF THIS WORK CONTRACT.
Assuming that you are providing your services in respect of original work,you are entitled for abatement and taxable value will be 40% of the total amount.Your liability will be 50% of the taxable amount.
If Mr X has only supplied labour, then he has provided services of MANPOWER SUPPLY , not of works contract.
If services of Manpower Supply are provided by an individual to a business entity registered as body corporate, then partial reverse charge is applicable. In this case service provider is required to pay 25% service tax and service receiver is required to pay 75% of the service tax.
However, one can restrict his liability to pay service tax is subject to the provision relating to N/N 33/2012, if he opts for it.
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