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

Service classification: garbage removal treated as taxable cleaning service and tractor hire as right-to-use tangible goods, supplier liable. Labour retained under the contractor's supervision is taxable as a contractual service within the Other Than Negative List with the contractor liable for service tax; tractor charges constitute the Right To Use Of Tangible Goods and are likewise taxable as services. Cleaning for removal of garbage should be classified as a taxable cleaning service rather than a manpower supply, neither component attracting reverse charge in the described facts, and the supplier's combined taxable services are subject to the supplier threshold exemption.