labour contract

[mali chand agarwala]

if my labour supplier not charged st 25% as he has no st registration then it is compulsory for me to pay 75% as i am also not registered under st

[Ravi Kumar Somani]

The liability to pay under reverse charge is imposed on service receiver. therefore, even if the service provider is not charging service tax on 25% portion and even in case he is not registered with the service tax department it is the obligation of service receiver to discharge his portion of liability under reverse charge. in the given case you have to discharge service tax on 75% portion in cash and later the same can be taken as CENVAT credt

[Mahir S]

Sir,

In respect of manpower supply, reverse charge shall be applicable only when following two conditions are satisfied –

- Service receiver is a business entity registered as a body corporate, and service provider is any one of the following entities :-

– Individual, Hindu undivided family (HUF) Firm (including limited liability partnerships) Association of persons If both the above conditions are not satisfied, Service Tax shall be payable by the service provider in ordinary course.

Since your firm is not registered as body corporate, therefore there is no liability for payment of service tax.

AI Summary

Reverse charge liability on manpower supply may fall on the service receiver when statutory conditions for reverse charge are met. Dispute concerns applicability of reverse charge on manpower supply: one view states the receiver must pay tax under reverse charge even if the supplier does not charge or is unregistered and can later take CENVAT credit; an alternative view states reverse charge applies only when the receiver is a body corporate and the provider is an individual, HUF, firm (including LLP), or association of persons, otherwise the provider must pay tax.