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Shubham Singhal (Student- ICAI) (175 Points)

17 May 2016

Suppose a pvt ltd company offer beauty services to customers at home. The person who will go and do the services can be full time employee of the company or consultant. It will involve the use of some beauty products which sometimes can be provided by the customer and sometimes our representative has to use his/her own product.

What will be the taxability of this?

Will company be liable for charging and paying service tax @ 15% only or will there be Work Contract?

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3 Replies

Nitin Bhuta (Chartered Accountants) (1253 Points)
Replied 17 May 2016

Service Tax is applicable under the category of beauty parlour services as one needs to see essential element of services rendered by service provider to service receiver as per the provisions of service tax act 1994

Shubham Singhal (Student- ICAI) (175 Points)
Replied 18 May 2016

Ok.

Will VAT be applicable on the materials used during the services?

One of the legal person is saying that it will be covered under Works Contract.

Nitin Bhuta (Chartered Accountants) (1253 Points)
Replied 18 May 2016

In some situations yes but certainly not in your case as the nature of services provided by you are essentially services and not a labour contract. If services are provided in the form of labour contract than only WCT is applicable. In my opinion WCT not applicable even if I stretch my imagination.

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