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Works contract

CA Vivek Goyal (Practising CA) (148 Points)

02 October 2013

I am having a query friends. There's a construction company providing works contract services to airport. These services are exempted from service tax wide Point no. 14 of not. no. 25/2012 dt. 20.06.2012. Such construction company is also receiving services of manpower recruitment from another agency. It will be chargeable to service tax and construction company is required to pay RCM. It can't avail cenvat benefit of service tax paid. Now whether there is any alternative to save this service tax or not?
Thanks in advance friends

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3 Replies

Manoj Agarwal (Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com) (3456 Points)
Replied 07 October 2013

1. Please Note that w.e.f. 01-07-2012, reverse charge is applicable only in case of supply of Manpower service. Earlier, the classification was Manpower Recruitment and supply but now the manpower recruitment is not covered under the new definition of 'Supply of Manpower' and therefore reverse charge not applicable.

2. If the service provider of manpower supply is a body corporate, then reverse charge is not applicable.

Kindly contact for further clarifications.

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CA Vivek Goyal (Practising CA) (148 Points)
Replied 13 October 2013

Sir, I just want to know what's the basic difference between supply of manpower service and manpower recruitment and supply????? Thanks in advance sir....

Manoj Agarwal (Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com) (3456 Points)
Replied 14 October 2013

Manpower Recruitment is similar to placement agencies who recruit employees for there clients. In manpower supply, a person is employed by one person and the work is performed under the control and superintendence of other person.

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