SERVICE TAX ON LABOUR CHARGE

[Rajeev Khulbe]

GOOD EVENING SIR,

WE WAS GIVE TO CONTRACT FOR NEW CONSTRUCTION.CONTRACTOR SUPPLY ONLY THEIR LABOUR. MATERIAL SUPPLY BY US.SIR TOTAL LABOUR CHARGES AMOUNT IS 14 LAKH. SIR MY QUERY IS THAT WHO WILL DEPOSIT SERVICE TAX ON IT. WILL SERVICE TAX DEPOSITED BY AS PER FOLLOWING MANNER

SERVICE PROVIDER SERVICE RECEIVER

50 %

[Rajeev Khulbe]

GOOD EVENING SIR,

WE WAS GIVE TO CONTRACT FOR NEW CONSTRUCTION.CONTRACTOR SUPPLY ONLY THEIR LABOUR. MATERIAL SUPPLY BY US.SIR TOTAL LABOUR CHARGES AMOUNT IS 14 LAKH. SIR MY QUERY IS THAT WHO WILL DEPOSIT SERVICE TAX ON IT. WILL SERVICE TAX DEPOSITED BY AS PER FOLLOWING MANNER

SERVICE PROVIDER SERVICE RECEIVER

50 % 50%

[Ganeshan Kalyani]

If pure labour charges involved then service tax to be charged by service provider. Thanks.

[Rajagopalan Ranganathan]

Sir,

Since it is a pure labour contract, the entire service tax is to be paid by the service provider. Only in respect of works contract service, that is, where both the materials and service is provided by the contractor 50% tax is to be paid by the service provider and the remaining 50% is to be paid by service receiver.

[YAGAY and SUN]

Pure labour contract shall attract service tax which would be collected and paid by the service provider but stay tuned as a matter of inclusion of material supplied by the service recipient is pending for adjudication in the Apex Court.

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Shri Ranganathan.

AI Summary

Service tax liability on pure labour contracts falls on the service provider; split liability arises when contractor supplies materials.
For pure labour contracts where the contractor supplies only labour and the recipient supplies materials, the service provider is responsible for collecting and remitting the entire service tax; where the contractor supplies both materials and labour as a works contract, tax liability is apportioned between provider and receiver, and the treatment of recipient supplied materials has been subject to higher adjudication.