Applicability of service tax - manpower agency

[BAL KRISHAN GARG]

Sir, letter sent by sup.of ser.tax "it has been observed that B took the services for their in house requirement of labour for various manufacturing activities and for which B paid an amount of Rs.6,83,557 /- during 06 - 07 towards labour charges excluding material. Here A has not provided labour but he was doing job of painting the c/fan blades and payment was received only on completion of paints which are ultimately cleared by B after excise duty. B has No supervision or relation with A's labour.dirction to labour not from B but labour done work under A's direction only . B mentioned A as a contractor in Form 16 and in his ledger account as a job charges and also confirm to ass.com. that A is a contractor. Whether Ser.tax Provisions apply under manpower agency? also bill was made on pieces basis and no nexus between no of labour and billing .

AI Summary

Service tax applicability on manpower supply depends on whether activity qualifies as job work rather than provision of labour services.
Taxability depends on whether the contractor performed painting under its own direction and billed per piece while the principal exercised no supervision; documentary evidence (contracts, purchase orders), excise clearance by the principal after receipt, and on-site verification are decisive to establish the activity as job work rather than a manpower supply.