applicability of service tax (urgent)

[Guest]

a labour contractor who has an permanent staff of 150 people whom he pay a fix amount of salary per month. he receives payment from other contractor for supply of labours on daily basis. is he liable to register under service tax act and charge service tax for his services of pure labour supply. if yes, what are penalty for not registering under services tax once it crosses threshold limit of 10lakh. what are the service tax code applicable for his.

[Himansu Sekhar]

Yes. You need to pay Stax if you are providing such services. If you provide services to a company, then the company will pay service tax, not you. For non payment of s.tax you will have to pay interest and penalty. For non registration penalty upto red 5000/. But for non payment of Stax, interest will be substantial. If your turnover is less than 60 lakhs, previous year, there will be a reduction of three percent of interest.

AI Summary

Service tax liability for labour supply: registration after threshold; penalties and interest apply, with reduced interest for smaller turnovers. The labour contractor's supply of pure labour is stated to attract service tax, necessitating registration once the turnover exceeds the statutory threshold; when services are provided to an entity liable to pay, that entity may discharge the tax. Non-registration carries a capped penalty and non-payment attracts interest and penalties, with a reduced interest concession for taxpayers whose prior-year turnover falls below a smaller-turnover benchmark. No specific tax code was provided.