Service tax bill

[Guest]

Dear All

I have few query about the service tax bill.

01. Our concern into the Manufacturing activity and few of our employee we are sent the supplier site develop the new product. that period of time they have worked to supplier end salary all benefit as per our company norms.

Now we wants to be collect the amount from supplier. whether can raise service bill for the above activity under manpower supply or how can i collect the amount ?. we need to be raise around 11 month in the single invoice

Please advice

Regards

selva

[Mahir S]

Sir,

The amount cannot be collected as manpower supply; you may add and collect it in the gross value charged for the project.

[YAGAY andSUN]

Dear Selvakumar,

Through your query, we understand that you had provided your skilled manpower (employees) to your client for developing the new product. Such activity duly falls under the category of manpower supply and recruitment services as per the new definition of Manpower. In our view you need to issue a Invoice/Bill under the provisions of Service Tax and charge the service tax as applicable.

Further, since you had not issued invoice/bill with in prescribed time limit therefore you may be penalized by the department for non compliance also you may have to pay the interest for delay in payment in service tax.

This is for your kind information.

Regards,

Neelam Taneja - Executive Consultant

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

[Mahir S]

There was change in the definition of Manpower Recruitment or Supply Agency at several occasions and considering recent change in the definition of Supply of manpower effective from July 1 2012, essence of the said judgment still holds good on principle and should not be chargeable to Service tax on deputation of employees to subsidiary/other companies for limited period under Supply of Manpower services.

Further, the company not being a manpower recruitment agency, and not registered under any law or service tax as manpower supply, hence question of supplying manpower does not arise.

Recently in the case of Arvind Mills ltd, the High court held that –

The definition though provides that Manpower Recruitment Supply Agency means any commercial concern engaged in providing any services directly or indirectly in any manner for recruitment or supply of manpower temporarily or otherwise to a client, in the present case, the respondent cannot be said to be a commercial concern engaged in providing such specified services to a client. It is true that the definition is wide and would include any such activity where it is carried out either directly or indirectly supplying recruitment or manpower temporarily or otherwise. However, fundamentally recruitment of the agency being a commercial concern engaged in providing any such service to client would have to be satisfied.

AI Summary

Manpower supply classification affects whether employer-deputed staff charges are taxable as service or part of project consideration. Whether payments charged for deputing employees to a supplier's site are taxable as manpower supply depends on characterisation under the statutory definition. Contributors differ: one view treats the amounts as part of project consideration, another treats them as manpower supply requiring a service tax invoice. Classification determines obligation to issue invoices and collect tax; noncompliance can attract interest and penalties. Judicial consideration focuses on whether the provider is a commercial concern engaged in supplying manpower.