Category - manpower recruitment, Service Tax

[BAL KRISHAN GARG]

Dear Madhawan , Whether related to my query B can'nt give its work to A on job work on the goods which can not be sent outside due to its process .Further for become liable under manpower recruitment there must be three ingredients : 1.Service are provided or to be provided to any person 2.Service are provided by a manpower recruitment or supply agency ;and 3.Services are in relation to the recruitment or supply of panpower, temporarily or otherwise in any manner here neither A is a manpower recruitment or supply agency nor the basic intention was to provide to B the employment and further labour was not required to follow up the instruction of B but the main object of the work processed is to complete under the instruction of A .

Posts / Replies

[madhavvan n bcom llb aca acs]

Job work means supplying the material by a customer to a job worker who carries out certain processes such as machining, drilling, welding, printing, dyeing etc. and returns the material to the customer after carrying out the processes who will than either use it for further manufacture or clear the product as received from the job worker. A is not satisfying the basic definition of jobwork as above, and in case the goods worked upon are excisable hence they are not liable for service tax as per notification if the final goods manufactured are exempt then A will be liable under the head business auxiliary service if they are working under your instructions are they performing some technical job then it needs to be examined if it falls under consulting engineering service

[Mukesh Kumar]

Indeed, it you show that it is job working activity in which principal supplied material to job worker on job work basis and job worker returns the material after processing to the principal., it would constitute as BAS (Business Auxilairy Service) and you would be out of service tax net. But, is it so? you have to ascertain and satisfy the concerned authority. I believe that mere assertion is not enough, you have to prove, which your bare facts are not able to prove.

[Mukesh Kumar]

Regarding, classification of the service under the category of Manpower recruitment and supply service, be careful, since 2005, even supply of manpower is included within its scope. However, if the terms and nature of agreement is describing the activity in some other manner, i agree with Mr. Madhawan that it is to examined carefully further.