Dear Experts,
One of the agency providing manpower supply to our company. Monthly they give two seperate bills.
Bill 01 - for Labour Charges
Bill 02 - for ESI and PF Reiumbursement
We paid ST under RCM on bill 01 and we took CENVAT on the same. but we have not paid ST under RCM on bill.02 because they raise seperate bill for that with supporting documents like, ESI,PF, PT paid challans, attendance sheet, salary sheet.
Pls clarify wheather ST is applicable on ESI & PF reiumbursement under RCM.
regards
Raghu
Service Tax Under Reverse Charge Mechanism Applies to ESI and PF Reimbursements Under Amended Section 67 A company queried whether service tax under the Reverse Charge Mechanism (RCM) applies to Employee State Insurance (ESI) and Provident Fund (PF) reimbursements billed separately by a manpower agency. They paid service tax on labor charges but not on ESI and PF reimbursements. An expert clarified that, according to the amended Section 67 effective from March 14, 2015, service tax applies to the gross amount charged, including reimbursable expenditures like ESI and PF. Another expert advised checking the relevant period of service to determine the applicable rules, as changes took effect on May 14, 2015. (AI Summary)
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