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Service Tax on Pure labour without any contractor., Service Tax

Issue Id: - 113967
Dated: 18-7-2018
By:- ALOK SHARMA
Service Tax on Pure labour without any contractor.

  • Contents

Sir,

Whether Service tax attracts on pure labour (daily wages labour) which is hired without any contractor.

kindly reply in detail.

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Showing Replies 1 to 15 of 15 Records

1 Dated: 18-7-2018
By:- ALOK SHARMA

All members are request to give their opinion. Specially Kasturi Sethi Sir, please reply


2 Dated: 18-7-2018
By:- YAGAY and SUN

In our view it is payable since the definition of manpower supply had been amended on this matter long back.


3 Dated: 18-7-2018
By:- ALOK SHARMA

Any reference which clear the doubts on this issue, please give.


4 Dated: 18-7-2018
By:- KASTURI SETHI

Dear Querist,

We are talking of pre-GST era. For leviability of Service Tax, there were three parameters and these were as follows:

(i) There must be a taxable Service Provider.

(ii) There must be a service receiver.

(iii) There must be consideration. (may be in some guise. That also falls in the definition of 'consideration'.

As per query, pure labour has been hired. Who has hired the labour is liable to pay ST ? You may not call him a 'contractor'. Since the activity (pure labour), conforms to all the above parameters, it is liable to ST. we are not to go by the nomenclature of 'contractor'.

I also welcome the views of other experts on this issue.


5 Dated: 19-7-2018
By:- YAGAY and SUN

Rule 2(g) of Service Tax Rules, 1994 defines: Supply of manpower temorarily or otherwise to another per to under under his superintendence of control.


6 Dated: 19-7-2018
By:- ALOK SHARMA

Sir,

In my query, it's clear that contractor has not hired labour through any contract, he has hired labour directly on daily wages worker without any contractor. So I don't think it will under the manpower supply proviso.


7 Dated: 19-7-2018
By:- KASTURI SETHI

The fact can be ascertained from the examination of statutory as well as non-statutory records of the party.


8 Dated: 19-7-2018
By:- Rajagopalan Ranganathan

Sir,

In my opinion the supplier of the labourers need not have entered into contract with any other contractor or the individual labourer. If he supplies man power for consideration then he is deemed to provide taxable service. Therefore you are liable to pay service tax under reverse charge mechanism since supply of labourer service is under RCM. Even issue of an invoice demanding consideration for the supply of service will be deemed as a contract.


9 Dated: 19-7-2018
By:- KASTURI SETHI

Invoice is a written contract. It has been held by Bombay High Court in 2007.


10 Dated: 19-7-2018
By:- YAGAY and SUN

In any case, ST is payable on such transactions under RCM.


11 Dated: 21-7-2018
By:- DR.MARIAPPAN GOVINDARAJAN

Shri Rengarajan's reply is very clear on the query. thank you sir


12 Dated: 22-7-2018
By:- YAGAY and SUN

We do endorse the views of our experts.


13 Dated: 22-7-2018
By:- KASTURI SETHI

Queries is lucky to have maximum opinions. Thus he be would be able to take a firm decision.


14 Dated: 24-7-2018
By:- Himansu Sekhar

Sl no 8 of notf 30/12 prescribes supply of manpower in form.This condition is absent in case of direct hiring of labour. No s.tax is leviable.


15 Dated: 24-7-2018
By:- Himansu Sekhar

Again the recipient needs to be a body corporate for rcm


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