applicability of service tax.

[Guest]

sir,we are engaging no of labors on outsourcing basis @Rs 6700.00 per month to third party labour contractor on tender basis by paying commission for supplying the labours..For this we are paying Service Tax @ 12.36% on total wage of ₹ 6700.00. My doubt is is the Service Tax applicable on wage of ₹ 6700.00 or the commission the labour contractor charges me for supplying labour.kindly clarify

.chakravarthy.

[YAGAY and SUN]

Dear Sid,

Service Tax would be paid on gross amount of the bill which is being duly raised by you provided you are a LTD or Pvt Ltd company and providing services to Ltd or Pvt Limited companies otherwise partial reverse charge would be leviable vide notification no 30/2012-ST.

Regards

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

AI Summary

Service tax applicability: levy on gross contractor bill for corporate recipients, otherwise partial reverse charge applies. Service tax is chargeable on the gross amount of the bill raised for supply of labour where the recipient is a limited company; otherwise the statutory partial reverse charge mechanism governs liability, shifting specified portions of tax to the recipient per the applicable notification.