CHARGING OF SERVICE TAX

[PANKAJ A]

Dear Madam,

We are a Proprietorship Firm, we are into Manpower Supply.

We Hire Employees on our Payroll and Supply to our Clients who are PVT LTD Companies.

While Billing to Them we charge them as per the details below:

1) Total Actual Gross Monthly Salary (Incl ESIC/PF/PT) 1000.00/-
2) Professional Fees (10% of (1)) 100.00/-
3) Service Tax (on Professional Fees Only). (14.5%) 14.50/-
Total Invoice Value 1114.50/-

We are paying the Service Tax Received by us on a regular basis from 1st April 2015.

Please let me know if this billing is right or not. As somebody told us that we should charge service tax on (1) ₹ 1100/- -and not only on (2)Rs. 100/-.

Our ST Consultant had asked us to charge on (2) only.

Awaiting a positive reply from your end.

Regards,
Pankaj A
[email protected]

AI Summary

Manpower Supply Firm Must Calculate Service Tax on Total Salary, Not Just Fees, Per Amended Notification 30/2012 A proprietorship firm involved in manpower supply sought advice on whether their service tax billing method was correct. They charged service tax only on professional fees, not on the total salary amount. Responses clarified that service tax should be calculated on the entire consideration, not just professional fees, effective from May 14, 2015. Additionally, it was noted that the responsibility for paying service tax has shifted to the service recipient under the reverse charge mechanism, provided the service provider is an individual or firm and the recipient is a corporate body, as per amended notification 30/2012.