TaxTMI 
TaxTMI 
Dear Experts
Kindly suggest - work done by contract workers in factory of manufacturer on piece rate is taxable under service tax or not.
Regards.
Work assigned to contractor on piece rate
15 Nov 2015 
14 Replies 
9211 Views Asked by
Manpower supply: classification and reverse charge liability arise where contractor workers operate under manufacturer's supervision in premises.
Taxability depends on the arrangement and control: if workers operate under the manufacturer's supervision and control it constitutes manpower supply subject to reverse charge; if the contractor retains control it is a job work/contract for work. Processing that amounts to manufacture is outside service tax, though supply of manpower remains separately taxable; piece rate billing does not determine classification. (AI Summary)
Taxability depends on the arrangement and control: if workers operate under the manufacturer's supervision and control it constitutes manpower supply subject to reverse charge; if the contractor retains control it is a job work/contract for work. Processing that amounts to manufacture is outside service tax, though supply of manpower remains separately taxable; piece rate billing does not determine classification. (AI Summary)