Dear Sir,
We are a manufacturer and we avail labor service from various labor contractor so in Diwali labor cpntractor claim the bonus for the financial year 2014-2015. My query is that is this transaction attract the service taxliability under Reverse Charge Mechanism as these labor contractors are proprietor. If yes then how much % Because this bous related to 2014-15 and that time the service tax was (12.3%) and liable by service receiver on 75% . But at present the service tax % is 14% and liable by service receiver on 100%.
On above transaction which provision will attract.
Regards
Swapneswar Muduli
Service tax at 14% applicable on bonuses to labor contractors under RCM; service receiver liable for full amount. A query was raised regarding the applicability of service tax under the Reverse Charge Mechanism (RCM) on bonuses paid to labor contractors. The question focused on whether this transaction, related to the financial year 2014-2015, attracts service tax and at what rate. It was clarified that the bonus falls under manpower supply services and is subject to service tax at 14% under RCM, with the service receiver being liable for the full amount. The responses confirmed the applicability of the current service tax rate of 14% on the transaction. (AI Summary)
TaxTMI 
TaxTMI 
TaxTMI 
