Service Tax on Labour Charge

[G B]

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

 

AI Summary

Service Tax Applies to Total Manpower Wages and Service Charge: (Wages + Service Charge) x 12.36% Explained A query was raised about whether service tax should be applied to the entire amount of manpower wage plus service charge or just the service charge. Two replies were provided. The first response indicated that service tax is charged on the gross value of services, referencing specific notifications. The second response explained that the taxable value for manpower services is determined by the total consideration, implying that service tax applies to both wages and service charge, calculated as (Wages + Service Charge) x 12.36%.