Will attract service tax under RCM on Bonus paid to Contractor., Service Tax

[Swapneswar muduli]

Dear Sir,

We are a manufacturer and we avail labor service from various labor contractor so in Diwali labor cpntractor claim the bonus for the financial year 2014-2015. My query is that is this transaction attract the service taxliability under Reverse Charge Mechanism as these labor contractors are proprietor. If yes then how much % Because this bous related to 2014-15 and that time the service tax was (12.3%) and liable by service receiver on 75% . But at present the service tax % is 14% and liable by service receiver on 100%.

On above transaction which provision will attract.

Regards

Swapneswar Muduli

Posts / Replies

[Ganeshan Kalyani]

The bonus paid to the contractor will be considered under Manpower supply service and thereby falls under reverse charge. The service tax @ 14% will be applicable.

[Mahir S]

Yes sir, the views expressed above are correct.