SERVICE TAX ON LABOUR CONTROR BILL

[Guest]

DEAR SIR,

 

We have received a labour contract bills every month amounting to Rs. 7 to 8 lacs - break-up as follows-

Basic- 244423

OT BAsic-  83141 

DA- 109912

OT DA- 37387

HRA- 17717

PF 13.61%- 48225

ESIC 4.75%- 23397

Total- 564202

Service Chgs- 56402

Total- 620622

Ser. Tax.- 76709

Total- 697331.

 

Sir, My querry is service tax charged on full amount on 620622/- is it right?, Sir, in this care service tax is calculated on workers gross payment and on statutory payment and service charges.  Is it correct service tax is calulated on statutory payment and on gross wages?

Or If I have to take seperate invoice of service charges Rs. 56402/- and on that amount only service charges is calculated Rs. 6971/- .  Please guide me what is right.  

Service provider contractor is private limited co. & if partnership plese brief me the calculation for both the terms.

My cell no. is 9321721880.

Thanking you.

[JAMES PG]

ST to be paid on the gross salary and the calculation shown above is correct.This has been clarified in CBEC Circular No. B1/6/2005-TRU dated 27.07.05

 

[bharani dharan]

Hi

In this regard pls do reply can we get a seperate bill for service charges to avoid service tax .

[Guest]

Respected sir,

 

In case stated by you as per my opinion Serrvice tax sholud be charged on only basic amount for the rest of amount you have to take seperate bil.  

AI Summary

Service tax on labour contracts applies to gross remuneration including statutory contributions, affecting contractor invoicing practices. Service tax on labour contracting services is computed on the gross remuneration paid to workers together with statutory employer contributions and the contractor's service charges; an administrative clarification supports applying tax to the full billed amount, while segregating service charges on a separate invoice is an alternative approach that may conflict with that clarification.