Service Tax on Labour Charge

[Asked by Guest]

Dear All,

We have opted a security Agency for manpower. I want to understand that, "Is service Tax applicable on whole amount" i.e Manpower wage + service charge 10% and on that service TaxOR "Manpower Wage different and service tax only on service charge which I pay"

Exp : Manpower Wage Rs.100 +10(service Charge) = 110 +12.36% S.Tax = 123.60/-

OR

Manpower Wage Rs. 100, Rs.10 Service Charge +12.36% Tax =11.24 = 111.24/-

 

Ideally, Service tax can  be applicable only on service charge !

 

 

which one is correct pls guide

 

 

 

Rgds

GB

 

[YAGAY and SUN]

Service Tax will be charged on the gross value of the services provided.  Further, refer Notification No. 30/2012-ST45/2012-ST and 46/2012-ST in this regard.

[CABALRAM PANDEY]

Dear Mr. Gagan 

So far as i have understood your question my reply is as below:-

The valuation of services rendered under Manpower Services shall be determined as per provisions of section 67 read along with Service Tax (Determination of Valuation) Rules, 2006. So, far as it is related to Manpower Supply, no specific provision for determination of taxable value has been provided. Hence the Taxable Value in my opinion will be total amount of consideration.

Hence, in my opinion it will be (Wages + Service Charge) X 112.36%= Invoice Value.

Rs. 100+ Rs. 10= Rs.110 + 12.36% of 110.00= 123.60

Thanks

AI Summary

Service tax on manpower supply applies to gross service value, including wages and contractor's service charge, under valuation rules.
Service tax on manpower supply is chargeable on the gross value of services, including wages and service charges, and where no specific valuation provision applies the total consideration received is the taxable value determined under the general valuation rules and applicable notifications.