Service tax applicability

[Ganeshan Kalyani]

Dear Sir,

I would like to discuss on determining category of services. A service provider who will take care of gardening, factory upkeep, and would help in production process. Does these the arrangement will be termed as 'Supply of manpower' and secondly whether the billing structured will be done as lumpsum bill or per man day cost.

kindly suggest.

regards,

ganeshan

[Guest]

If superintendence and control with service receiver, would be covered by "Manpower Supply Service". Nature of billing though indicative but not conclusive of nature of service. If billed on per man day basis, likely to be covered by manpower supply.

[Madhukar N Hiregange]

The law prescribes that the nature of the transaction is to be determined. Here if the responsibility of garden and factory is clearly the liability of the service provider and the agreement has penalties for not fulfilling the requirements then it would NOT be supply of manpower.

If billed in man hours - by itself doe not mean classification as manpower services. The consideration cannot determine the classification. However preferable that payment is also made job wise to avoid disputes.

AI Summary

Manpower supply service: classification hinges on control and contractual responsibility, not billing; prefer job wise payment to avoid disputes. Classification as Manpower Supply Service depends on whether the service recipient exercises superintendence and control over personnel; per man day billing is indicative but not conclusive. If the service provider assumes primary responsibility for tasks, supported by contractual obligations and penalty clauses, the arrangement is a contracted service rather than manpower supply; payment structure should not determine classification, and job wise payment is preferable to avoid disputes.