|Home Forum Service Tax This|
|A Public Forum.
Anyone can participate to share knowledge.
|We acknowledge the contributions of Experts/ Authors.|
LABOUR CHARGES, Service Tax
Posts / Replies
Showing Replies 1 to 7 of 7 Records
There is a Change of Service tax liability structure from partial reverse charge to full reverse charge on manpower SUPPLY AND SECURITY services. The Notification No. 30/2012-ST dated 20-06-2012 has been amended vide Notification No. 7/2015-ST dated 01-03-2015, there by shifting the Supply of Manpower and Security services from Partial Reverse Charge to Full Reverse Charge. The stated change will be effective from 01-04-2015.however in the present facts of the case labours are on payroll of the companyand hence no question of reverse charge mechanism is arise.
THANK YOU FOR YOUR REPLY
If reverse charge is not applicable than please provide me some supporting circular, notice or any article.
And if suppose company don't deduct PF then?
As Labour is supplied to the company by the contractor and as the company pays the Labour charges to the contractor, therefore RCM shall be applicable and the Contractors are liable to get registered with the company and charge and hence pay the service tax on the gross amount including Labour charges, PF, ESIC etc.
The Company also deduct PF from the charges and deposit it in its own code,
which has mandatory as per PF ESI rules, it don't means that labours are on payroll of company.therefore RCM shall be applicable pay the service tax to avoid litigation.
whosoever is doing this is in great trouble. Collecting consideration for service without raising invoice is an act which constitute fraud.
For invocation of reverse charge mechanism, service provider must be individual, HUF of partnership firm and service receiver should be a body corporate. if it is not so reverse charge mechanism can not be invoked.
in this case contractor is an individual and receiver is a company. reverse charge is applicable. and service receiver i.e.company is liable to pay service tax to the extent of 100%.
as labour charges ( i assume salary of the labourers) and labout supply charges (consideration retained by contractor for providing labour) is paid to the contractor only. Being so, question of emploer employee relationship between company and labourers does not arise at all..
As company is liable to pay tax to the extent of 100% contractor can easily charge a consolidated amount invlisive of salalry payable to labour and consideration for supply of labour.
cionsideration the new explanation to section 67 definnfing term consideation, ampout of of ESIF and of and any other amount which contractors collect and paid tp government shall be included in the value of service.
Old Query - New Comments are closed.