Service Tax for Man Power Supply

[Pon Ramar]

Sir,

Am a Man Power Supplier for Tamilnadu Government departments. I have Annual Turnover of around ₹ 10,00,000 PA. Who will pay the Service Tax? Me(SP) or Tamilnadu Government(SR)?

AI Summary

Manpower supplier must pay 100% service tax; Reverse Charge Mechanism inapplicable for non-corporate government departments. A manpower supplier for Tamil Nadu government departments inquired about service tax obligations, given an annual turnover of 10,00,000. Experts clarified that the supplier must pay the service tax since the government departments are not body corporates, thus making the reverse charge mechanism (RCM) inapplicable. The supplier is liable for 100% of the service tax, as the RCM applies only when the service receiver is a business entity registered as a body corporate. The discussion emphasized that the gross receipts should be treated as cum-tax, as the government will not reimburse the service tax.