Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Monday, August 6, 2012

Service Tax on Manpower Supply Services


As per the Service Tax Notification No. 30/2012 dated 20th June 2012, reverse charge mechanism of service tax has become applicable on a few services w.e.f. 1st July 2012, including manpower supply services. Under this scheme, service tax is payable to some extent by the service recipient instead of the whole amount being paid by the service provider. The service receiver has to register himself under service tax. Further, the service receiver cannot claim general exemption limit of Rs. 10,00,000, therefore he has to pay service tax even on a few rupees worth of service received.
Services provided or agreed to be provided by way of supply of manpower for any purpose are taxable under the service tax law, wherein 25% of the service tax payable will have to be deposited by the person providing service and 75% of the service tax payable will have to be deposited by the service receiver.
However, it is to be noted that the reverse charge is applicable only if the service receiver and the service provider satisfy a few conditions, which are as follows:

·         The service provider is an Individual (proprietor), or partnership firm (registered or unregistered) or an HUF.
·         The service receiver is any company formed or registered under the Companies Act, 1956 or a business entity registered as body corporate located in the taxable territory.

In case the abovementioned conditions are not satisfied, the service provider has to pay tax on the full amount of service.

Therefore, if a person (body corporate/company) is receiving services of manpower supply, then it must register itself for service tax. And, if it has already registered itself under the service tax act and is receiving these services, then it has to add this specific service in its service tax registration certificate.

Example: If manpower supply services worth Rs. 1000 are supplied by an individual, partnership firm or HUF, to a company or body corporate, service tax @12.36%*25%*1000 (Rs. 30.9) will be deposited by the service provider, and  @12.36%*75%*1000 (Rs. 92.7) will be deposited by the service receiver.
Posted by at

21 comments:

  1. What if service provider is a Pvt. Ltd. company?

    ReplyDelete

  2. Service provider pay service tax on full amount

    ReplyDelete

  3. What if Service receiver is non resident ?
    Export of Man power service will be taxed for service Tax ?
    I have an employed a person who will supervise in Sri Lanka i.e. outside India. The employee and myself (partnership firm) are Indian resident. I guess this should be exempt from tax. Any suggestions ?

    ReplyDelete

  4. what if the amount of service tax is not separately mentioned in the invoice? all other conditions being satisfied.

    ReplyDelete

  5. does the company (service recipient)get 75 % or 25 % or 100 % input tax credit?????

    ReplyDelete

  6. Which way service receiver can take credit of 75% amount ?

    ReplyDelete

  7. If I am running a business from abroad will I am be tax payable if I then what will be the tax amount. recruitment services in Dubai

    ReplyDelete

  8. For making customers happy the delivery services should do a lot of things. They should be punctual and should maintain good supply chain also. messenger service

    ReplyDelete

  9. if we raised a erection commissioning bill outside the india, so should we apply service tax on invoice....

    if yes why??????
    if no why???????

    ReplyDelete

  10. if i am providing manpower services ,Housekeeping and security services to services to Co-operative housing society then how will be services Tax to provider and receiver ??????????

    ReplyDelete

  11. Thanks for sharing. I just want to know the latest service tax on Manpower Supply Services?

    ReplyDelete

  12. What if service provider is not register with Service Tax

    ReplyDelete

  13. This comment has been removed by the author.

    ReplyDelete

  14. Very nice post. Thanks for the important information about man power agency

    ReplyDelete

  15. Supply Chain Management study is now having huge demand as a degree or diploma, as individuals having the required qualification will remain much ahead in the queue of job seekers. Diploma In Supply Chain Management

    ReplyDelete

  16. This comment has been removed by the author.

    ReplyDelete

  17. Supply Chain Management has become a very powerful technique as it increases the responsiveness to the changing business conditions and enhances the competitiveness of the organization.supply chain management certification online

    ReplyDelete


  19. Thanks for sharing helpful information, I really like your all post. I will bookmark your blog for future updates. Send Gift To Pakistan

    ReplyDelete

  20. Your good knowledge and kindness in playing with all the pieces were very useful. I don’t know what I would have done if I had not encountered such a step like this.
    BSS Diploma In Industrial Safety in Chennai

    ReplyDelete

Subscribe to: Post Comments (Atom)