Service Tax under which Category ?

[paresh ayadi]

Sir,

We have given contract for removing garbage and other unused material to one party from our premises

In his invoice he has mentioned Tractor charges and labour charges on day and qty basis.

The service fall under which category...

[Rajagopalan Ranganathan]

Sir,

Tractors are provided under supply of tangible goods service and supply of labour will fall under man power supply service.

[Ganeshan Kalyani]

Manpower is covered under reverse charge subject to conditions. Thanks.

[KASTURI SETHI]

Dear Sh.Paresh Ayadi,

In your situation, manpower has not been supplied because labour remained under the supervision and control of contractor. Contractor is liable to pay ST under the category of "Other Than Negative List." This is as per the definition of 'Manpower Recruitment or Supply Agency Services' under erstwhile Section 65(105)(K) Accounting Code 00440060. NO RCM.

Regarding the tractor charges, these fall under the erstwhile category of 'Right To Use Of Tangible Goods' under Section 65(105)(zzzzj). Accounting Code No.00440445.At present this is also covered under "Other Than Negative List" No RCM

In both services SP is liable to pay ST and perform all legal formalities.

 

[Ganeshan Kalyani]

Sir the contract given by querist is for removing garbage and other unused material. May it fall under cleaning service and taxed accordingly. This also need to be taken care Thanks.

[KASTURI SETHI]

Yes Sir. Even then it will be under the category of "Other Than Negative List" but not under Manpower Supply. Accounting Code will be changed accordingly.

[KASTURI SETHI]

Sh.Ganeshan Kalyani Ji,

Since both services, namely, Cleaning Services' and 'Right to Use of Tangible Goods' are not under RCM, the assessee would be eligible for threshold exemption limit of Rs.Ten Lakhs (combined).

[Ganeshan Kalyani]

Obviously Sir. But we do not know the turnover of the querist. Hence querist has to check and take a call. Thanks.

AI Summary

Debate on Service Tax Category for Garbage Removal Contract: Tractor vs. Labor Charges and Potential Exemptions A discussion on a forum revolves around determining the appropriate service tax category for a contract involving garbage removal, with charges for tractors and labor specified. One participant suggests that tractor charges fall under 'supply of tangible goods service,' while labor charges relate to 'manpower supply service.' Another adds that labor is not supplied directly, thus the contractor is responsible for service tax under 'Other Than Negative List.' The discussion also considers whether the service might be categorized as 'cleaning service,' which impacts the applicable accounting codes and tax responsibilities. The possibility of a threshold exemption is also mentioned.