TaxTMI 
TaxTMI 
Please advice minimum amount of service tax for payment to labout contractor
Service Tax on Labour Contractor
04 Aug 2012 
15 Replies 
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Reverse charge on labour contractor requires service receiver to pay majority of tax; provider bears remaining share.
Reverse charge applies to specified labour contractor services: the service receiver must register, pay the receiver's portion of tax under reverse charge on a prescribed proportion of the contract value, and may claim CENVAT credit only after payment (by challan); the provider pays the residual portion and credits on its invoice. If the provider does not charge tax, the receiver still pays its share and may take input credit on payment. Point of taxation rules determine liability for advances when notification conditions are met. (AI Summary)
Reverse charge applies to specified labour contractor services: the service receiver must register, pay the receiver's portion of tax under reverse charge on a prescribed proportion of the contract value, and may claim CENVAT credit only after payment (by challan); the provider pays the residual portion and credits on its invoice. If the provider does not charge tax, the receiver still pays its share and may take input credit on payment. Point of taxation rules determine liability for advances when notification conditions are met. (AI Summary)