Payment of service tax for catagory -Supply of Man Power Service

[vinay wakde]

Payment of service tax  under service catagory 'Supply of Man Power Service'

As per the Notification No. 15/2012-ST dated 17.3.2012, the service provider is required to be paid 25% service tax and  remaining 75% to be paid by the service recipient. 

Kindly let us know whether we are eligible to take credit to the extent of 25% paid by the service provider and 75% paid by us under reversed charge method on the strength of challan. 

Kindly clarify.

Regards,

VINAY 

 

[YAGAY and SUN]

Though 25% will be paid by the recruitment agency but it will be charged from you in the bill raised by the Recruitment agency.  Therefore, you may avail the credit of this amount as input services.

[JAMES PG]

Cenvat credit of balance 75% can be taken on the basis of GAR -7 Challan. provided the payment to the Service provider is made in full

[Dilip Darji]

Dear Sir.

Subject to the condition that the services received by you are Input Services, as defined in CCR.

AI Summary

Cenvat credit available for manpower supply when billed tax and reverse-charge payment meet input service and payment conditions. Entitlement to Cenvat credit arises for the tax component recovered by the recruitment agency in its invoice, and credit for the reverse-charge portion may be taken on the basis of the GAR 7 challan provided payment to the service provider is made in full and the services qualify as Input Services under the Cenvat Credit Rules.