TMI BlogService Tax Liability under RCM on Bonus Payments to Manpower ContractorX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear All, Please let me know the provision of service tax applicability on bonus payments by employer to manpower contractor for distribution to casual labor of bonus against contractor bill. scenario also under Reverse Charge mechanism, and relevant referance/proviosn , of rules. Regards Rakesh Palwial - Reply By YAGAY AND SUN - The Reply = Law is clear on this aspect. It says the Gross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amount would liable to Service Tax. - Reply By Ganeshan Kalyani - The Reply = Yes service tax is applicable on such payment under reverse charge mechanism. - Reply By KASTURI SETHI - The Reply = I agree with the views of both experts. Bonus is also a kind of incentive and there has been a lengthy and healthy discussion on the applicability of Service Tax on the amount of incentive in this fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rum. It is covered under Section 67 (3) of the Finance Act and hence clearly falls in the definition of 'Consideration' defined in Explanation (a) to Section 67 . However, there are some conflicting judgements of CESTAT on this issue but law is self-explanatory. - Reply By Ganeshan Kalyani - The Reply = Judgements are favourable and unfavourable as well. Both appellant and respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent fetches the judgement suited best to his/her contention and argues in the court of law. Ultimately it is the presentation and th ability of argument the case is decided upon. Therefore it is always advisable to embrace the law first then if needed the other option to be sought for. As always I have seen Kasturi Sir first replies based on section and provision and show a way to follow written ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rules first I am most convinced with his view point that I first try to understand the law first and if the contention is at peak then I resort to case law. Thanks. - Reply By Mahir S - The Reply = It is settled law that service tax is required to be paid for such Bonus payments. - Reply By KASTURI SETHI - The Reply = Sh.Ganeshan Kalyani Ji, If any assessee understan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds the law properly and follows the law, ultimately he wins the case though he has to cross through the rigours of litigation. Understanding the correct interpretation of law is very crucial. Whenever any client comes to me, I take too much time to understand the SCN and tell him what would be the fate of that SCN whether he would succeed or fail. If succeeds, at which stage. - Reply By Ganesha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Kalyani - The Reply = Yes I agree with you Sir. - Service Tax Liability under RCM on Bonus Payments to Manpower Contractor - Query Started By: - Rakesh K Paliwal Dated:- 3-2-2016 Service Tax - Got 7 Replies - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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