Maid Service Provider

[Sijith Moahmmed]

In our case, we are maid service providers and is a proprietorship firm. We sell different maid service packages. The client who purchases our packages , pay it in full to us in advance . We bear all the expenses to fulfill the sold maid service packages. The maid/maids we use/employ to fullfill the sold maid service package are paid by us. No do not charge any commission apart from the service package charges. We have not crossed 20L annual turnover. Should we register under GST? Are we covered under the ambit of Intermediary services? All our clients are unregistered individuals , as we cater only to residences. Is Reverse Charge Mechanism (RCM) applicable to us? Please advice

[KASTURI SETHI]

Query-wise reply is as under:-

1. Your activity is covered under the category of 'Manpower Supply'.

2. Since you have not crossed threshold exemption limit, you are not required to apply for registration under GST Act. Do you supply any other service ? Pl. confirm.

3. Your activity is not covered under the category of 'Intermediary Services'.

4. RCM is not applicable. RCM is applicable to Supply of security Service only and NOT Manpower Supply.

5.No benefit is available for supply of manpower to residential premises.

6. Temporary or casual labour supply is also covered under Manpower Supply.

7. Your activity is in the course of business.No benefit is available for supplying services to unregistered individuals.

It is pertinent to go through the erstwhile definition of 'Manpower Supply' under Service Tax era which is relevant today also.

Section 65 of Finance Act, 1994

[(68) “manpower recruitment or supply agency” means any [person] engaged in providing any service, directly or indirectly, in any manner for recruitment or supply of manpower, temporarily or otherwise, [to any other person];]

[Sijith Moahmmed]

Thank you for your reply .We don't have any other business or services other than maid service.

Last day we were summoned by GST official in Cochin, Kerala and asked us to register for GST, as our services are listed / clarified under intermediary services. As per them, even though this was already mentioned in GST bill but clarified in June2019. We were told threshold limit of 20L is not applicable in intermediary services.

Please advice.

[Ganeshan Kalyani]

The Advance ruling is clear. It clarifies the rate applicability on new vehicle and the rate on job work on the new vehicle.

[Ganeshan Kalyani]

Sorry , wrongly posted my reply in this issue ID.

[Ganeshan Kalyani]

Reproducing Section 2(13) “intermediary” means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account;

[Ganeshan Kalyani]

As per above referred definition, in my view, your service do not seems to be an intermediary service.

[KASTURI SETHI]

If it is so, you can ask for a letter in writing to this effect. . Board's Circular No.107/26/2019 dated 18.7.19 does not bring your activity in the definition of ,'Intermediary services'. It is well settled law that Board's circular has no statutory force and hence cannot override the Act. Moreover, Board's circular is not binding on the tax-payer.

Also go through my reply against Issue Id 115250 dated 29.7.19 wherein the definition of 'Intermediary services' has been discussed at length.

[Sijith Moahmmed]

Thank you sirs for you advice

AI Summary

Manpower supply classification excludes intermediary status, so GST registration depends on threshold and RCM not applicable.
Maid services are classed as manpower supply, including temporary or casual labour and supply to residential premises. Registration under GST depends on meeting the statutory turnover threshold; below-threshold providers need not register. The activity is not intermediary service where the provider supplies and pays the workforce directly, and the Reverse Charge Mechanism does not apply to such manpower supply. Administrative circulars do not override the Act; obtain written clarification if authorities assert a contrary classification.