LABOUR CHARGES ON SERVICE TAX

[Rajeev Khulbe]

GOOD AFTERNOON TO ALL MY GREAT EXPERTS,

SIR CAN YOU PLEASE TELL ME

1 THE MEANS OF PURE LABOUR CONTRACT.

2- IS LABOUR CHARGES / PURE LABOUR CHARGES SERVICE CAME UNDER R.C.M WHERE SERVICE PROVIDER AND SERVICE RECEIVER WILL PAID SERVICE TAX @ 50%(15*50/100 = 7.5%)

AI Summary

Pure labor contracts exempt from RCM; full service tax applies. Refer to Notification No. 30/2012-ST for details. A query was raised about the applicability of service tax on pure labor contracts under the reverse charge mechanism (RCM). Experts clarified that pure labor contracts, which involve services provided without materials, do not fall under the works contract service category, and thus RCM is not applicable. Full service tax is to be paid by the contractor for services like residential or commercial construction, installation, or repair. The discussion referenced Notification No. 30/2012-ST and emphasized that pure labor does not include material, distinguishing it from works contracts, which involve both labor and materials.