Service Tax Charged on the Bonus amount

[Guest]

Dear Sir,

Greeting!

Our company is receiving services of Pantry Boy & Housekeeping boy from one of the renowned Facility management contractor.

Our company is going to pay Bonus to Pantry Boy & Housekeeping boy through bill submitted by the contractor.

In the bill, contractor has charged (A) Bonus Amount + (B) Service Charges on the Bonus amount @12.5% + Services Tax on both the amount (A+B) @10.3%

My query is that whether service tax should be charged on the bonus amount.

 

AI Summary

Service Tax Applies to Bonuses for Pantry and Housekeeping Staff, No Exemption Under Current Tax Laws A company inquired about the applicability of service tax on bonus payments made to pantry and housekeeping staff through a contractor. The contractor charged a bonus amount, service charges on the bonus at 12.5%, and service tax on the total at 10.3%. Multiple respondents confirmed that service tax is applicable on the gross amount, including the bonus, as there is no exemption for bonuses under the current tax laws. It was also noted that the bonus is considered part of the remuneration, thus attracting service tax.