Work assigned to contractor on piece rate

[Narendra Soni]

Dear Experts

Kindly suggest - work done by contract workers in factory of manufacturer on piece rate is taxable under service tax or not.

Regards.

AI Summary

Is work by contract workers in factories subject to service tax? Key debate on manufacturing vs. manpower supply. A discussion on a forum revolves around whether work done by contract workers in a manufacturer's factory on a piece rate basis is subject to service tax. The main points debated include whether the work arrangement constitutes a manpower supply service, which would be taxable under the reverse charge mechanism, or a manufacturing process, which might be exempt from service tax. The distinction hinges on whether the workers are under the supervision of the manufacturer or the contractor. Despite multiple expert opinions, the query remains unresolved, particularly concerning the tax applicability before July 1, 2012.