Service Tax applicability on P.F/ESI consultation

[sunil mehta]

A labour law consultant apart from rendering legal consultancy in respect of labour & allied laws to various business organisation,also prepares, maintains records pertaining to wages,leave ,P.F.,ESI etc of his clients at his own office(manual or computerised).He charges them as "P.F./ESI consultation charges".No service tax is levied on P.F/ESI consultation vide circular from CBEC. Query (a)Is it correct view? Query (b):Now he professional labour consultant gets work to deploy skilled /supervisory staff at clients' own office /factory premises to maintain all labour records (as stated above)either manually or computerised.He has also to deploy his own PC/printer and other infrastructure at client's place.He has also to see that there is compliance of all labour & allied laws by client at project site or factory.The client pays him lumpsum for staff and use of PC etc on monthly basis.The skilled staff of labour consultant carries out this above assignment professionally as if they would have carried out at labour consultant's own office.Skilled staff does not work under control of client.Service tax is levied under which category for i)comliance work ii)records maintenance work?

[Surender Gupta]

There is no specific provisions in the service tax law to tax the service described in the query. Also there is no apparent provision in the service tax law which make the service liable to tax in a residual head. Therefore, as per general understanding maintenance or compliance work of P.F. / ESI etc. is not liable to service tax as on date.

AI Summary

Service tax applicability on PF/ESI consultation: compliance and records-maintenance services are not leviable under service tax currently.
Service tax applicability on PF/ESI consultation is limited: office-based preparation and maintenance of PF and ESI records has been treated as not leviable under prevailing service tax guidance. Deployment of the consultant's skilled staff and equipment at client premises to perform records maintenance and statutory compliance likewise lacked a specific charging provision or residual head in the service tax law, and was therefore regarded as not liable to service tax as of the date of the reply.